India’s leading digital wallet player Paytm is now all set to begin its payments bank operations from May 23, after receiving the final approval from the Reserve Bank of India (RBI).
“…Paytm Payments Bank Ltd (PPBL) has received the final licence from the RBI and would commence its operations on May 23, 2017,” it said in a public notice.
Paytm currently has over 218 million mobile wallet users and the company will transfer its wallet business to the newly incorporated entity — Paytm Payments Bank Limited (PPBL) — under the payments bank license awarded to Vijay Shekhar Sharma, the founder of One97 Communications that owns Paytm.
A Paytm spokesperson said, “We are in process of launching Paytm Payments Bank on 23rd May. We recently received approval from the RBI for Renu Satti to be the CEO.” Satti is currently the vice-president, business, at Paytm.
The Paytm wallet will move to PPBL after May 23. If the customers do not wish for that, they have to inform Paytm (before May 23), which will in turn transfer the wallet balance to the consumer’s bank account once such details are shared.
In case the wallet has been inactive in the last six months, the transfer to PPBL will only happen once the consumer gives specific consent.
As per the initial guidelines from RBI, Payments banks can accept deposits of up to Rs 1 lakh per account from small businesses and individuals.
With the goal of developing money related incorporation, RBI kicked off an era of differentiated banking by allowing SFBs (small finance banks) & PBs (payments banks) to start services. A total of 21 entities including 11 for payments banks were given in-principle nod last year.
Currently, Bharti Airtel Ltd. and India Post are the only players that have already started Payments Bank operations. Aditya Birla Idea Payments Bank is expected to be launched services in the first half of this year.
Sharma will hold the majority share in Paytm Payments Bank, with the rest being held by Alibaba-backed One97 Communications. Though, the Chinese entity will not have direct shareholding in the payments bank.
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Himani Sharma, From ITvoir News Desk