Money & Banking

Paytm gets RBI approval for payments bank

| | Updated on: Jan 03, 2017

​Mobile commerce and payments company Paytm today said that ​Reserve Bank of India (RBI) has finally given permission to formally launch Paytm Payments Bank.

In a blog titled "Everything Changes Again: From Payments to Payments Bank", Paytm's founder Vijay Shekhar Sharma mentioned that, "Today, Reserve Bank of India gave permission to formally launch Paytm Payments Bank. We can’t wait to bring it in front of you...This is our chance to build something that every Indian can be proud of. No other role or responsibility means as much to me as the privilege of building Paytm Payments Bank, and I intend to take a full-time executive role in the Bank."

However, he did not mention the exact date of the launch of its payment bank. Paytm, which was launched three years ago on this day today, as a mobile wallet is now aiming to build a new business model in banking industry, focussed on bringing financial services to hundreds of millions of un-served or underserved Indians, Sharma said.

"Today, Paytm has become the category leader and changed the way India pays. From villages to cities, from corner vegetable stalls to milk booths, small shops to large retailers, everyone embraced the new way to pay by Paytm. Now, we are embarking on a new and even more exciting journey," he added.

With power of technology and innovation-at-scale, we aim to become a benchmark in world of banking.

Vijay Shekhar Sharma is among the 11 others players including Vodafone, Airtel, Fino PayTech who had applied for a payment bank license in 2015. While Airtel has already gone live with its payments bank in few states, Fino plans to launch it the first half of this year.

​Last year, the RBI had issued ​a ​separate operating guidelines for payments banks and small finance banks in view of their differentiated nature of business and focus on financial inclusion. The RBI has granted in-principle approvals to 11 payments banks (August 2015)​. ​

The central bank​ ​had said ​that ​it will have no objection to payments banks making arrangements with other scheduled commercial bank / small finance bank, whereby amounts in excess of the prescribed limit of ₹1 lakh can be swept into an account opened for the customer with the latter. This arrangement should be activated with the prior written consent of the customer.

​Paytm has also launched UPI-enabled payment features on its wallet to further bolster its position in the digital payment space.

Published on January 12, 2018

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