PayTM has received formal approval for its Payments Bank from RBI today. Earlier, RBI had provided an ‘in principle license’ to the founder and CEO Vijay Shekhar Sharma and as of today, the final license has been granted. According to Paytm, they will be commencing banking operations soon.
According to directions received from RBI, PayTM will be moving its wallet platform into the new Payments bank and any users were free to move their PayTM wallet money back into their bank accounts till 31st January 2017. Post the launch of the Payments bank, transfers between the wallet and the Payments bank account will be free of charge.
Customers who choose to opt out of the move can get in touch with the PayTM customer care. But if they want to stay with the move, full KYC wallets will be transferred as full KYC wallets into the bank and minimum KYC wallets will be transferred as minimum KYC wallets.
This banking license comes at a time when other players like Reliance Industries, Vodafone, Airtel and a few more are also in the process of getting banking license approvals. There have been multiple reports surrounding the Payment bank from Paytm, with some even stating that the bank will be offering a 14.5% interest rate which is definitely much higher than any other bank is offering at the moment. If this does turn out to be true, this might draw more users to the bank than any other reason at the moment.
According to Mr. Vijay Shekhar Sharma, “At Paytm Payments Bank, our aim is to build a new business model in banking industry, focussed on bringing financial services to 100’s of millions of unserved or underserved Indians. With power of technology and innovation-at-scale, we aim to become a benchmark in world of banking.”
Further details about the bank and its offerings are yet to be known. Stay tuned to this space for more information and check this blog post for the actual announcement.