Paytm Payments Bank Ltd, which got a final approval from the Reserve Bank of India last month to run and operate a payments bank in the country, will start operations next week, said promoter and founder Vijay Shekhar Sharma.
Sharma told BusinessLine that the payments bank will be commercially launched on February 21.
While he did not clarify on the location of the launch, the company is likely to start with Uttar Pradesh — which also happens to be Sharma’s home State. It will then expand operations to the North-East in the first phase, and is likely to have around 1 lakh banking correspondents.
Early this month, Sharma, along with two companies, One97 Communications Ltd and One97 Communications India Ltd, had invested ₹218 crore in the payment banks. Sharma is also the promoter of these two companies and holds about 51 per cent stake in Paytm Payments Bank.
One97 Communications holds the rest.
Meanwhile, by selling 1 per cent of his stake in One97 Communications Ltd to another shareholder of the company, Sharma also raised about ₹325 crore, to be invested in the payments bank.
According to Registrars of Companies documents, Chinese e-commerce giant Alibaba and its sister concern Alipay, which own about 41 per cent stake in One97 Communications Ltd, has also infused fresh funds into the banking entity, thus leading to an indirect involvement of the Chinese firm.
Paytm’s orginal plan was to start the bank’s operations in April.
Rivals such as Airtel and India Post have already launched their operations and have been pushing it through massive advertisements and campaigns.
Other applicants such as Fino Paytech, National Securities Depository and Mukesh Ambani-led Reliance are also likely to launch their respective banks by May, say sources.
Paytm Payments Bank plans to leverage its wallet business that will soon get merged with the banking entity. It plans to open 200 million accounts, across current and savings, in the first year of operations, Sharma had told media some time ago. The bank plans to sell products such as loans, wealth management and insurance to drive revenues.
Payments banks are not allowed to lend themselves, but many are banking on cross-selling banking products through partnerships.
Payment banks, conceptualised by the Reserve Bank of India, can accept a restricted deposit, which is currently limited to ₹1 lakh per customer, but cannot issue loans and credit cards. Both current and savings accounts can be operated by such banks at flexible interest rates. They can issue services such as ATM cards, debit cards, online banking and mobile banking.