According to a report in PTI: The Noida-headquartered company had received an in-principle approval from RBI to set up a payments bank in August last year.
Payments bank can accept demand deposits and savings bank deposits from individuals and small businesses, up to a maximum of Rs 1 lakh per account. The bank will be a new entity, where 51 per cent of the shares will be held by promoter Vijay Shekhar Sharma and the remaining shares will be split between the existing wallet company and another group firm.
The challenge in converting these customers into account holders is to complete the ‘know your customer’ process, which presently requires a personal interaction and collecting identity and address proof.
“We hope to complete all the requirements and hand them to RBI for their go-ahead by August… by then, we will also have a brick and mortar set-up in place,” Co-founder and CEO, Paytm, Vijay Shekhar Sharma said.
However, the focus will be on using technology and connecting the unbanked and underbanked population, he added. “We will start with north east and central as we mentioned during the licence process,” he said.
Post the launch of the bank, Paytm will become an end-to-end payment financial services firm with banking and mobile wallet services. It also has an e-commerce platform as well as supports digital payment of recharge and utility bill payment.
“One of the things we are doing is introducing cards with QR codes, which will enable users without smartphones to transact,” Sharma said.
According to reports, Paytm has partnered Wipro to create the requisite technology infrastructure for the payments bank business.
Sharma has brought on board Shinjini Kumar, former consultant at PricewaterhouseCoopers, as CEO-designate of the payments bank.
Paytm to expand online travel business
Paytm, the payment aggregator, has decided to expand its online travel business aggressively by branching out into rail, road, airline and tour bookings as it looks forward to drive more traffic to its portal that is largely payment driven.
For hotel and bookings, it has already partnered with services marketplace Ezeego 1 and is also in talks with several airlines. It is also in the process of integrating the rail inventory of Indian Railway Catering and Tourism Corporation on its platform.
Paytm is planning to invest around Rs 120 crore on its travel marketplace in the current financial year.
A horizontal player in the e-commerce space offers multiple shopping categories such as books, apparel, appliances and more on a single platform whereas, a vertical player specialises in one kind of offering.
Paytm is headquartered in NOIDA. The site was launched in 2010 in India and is owned by One97 Communications. The firm started by offering mobile recharging, adding bill payment and e-commerce with products similar to businesses such as Flipkart, Amazon and Snapdeal.
In 2014, the company launched Paytm Wallet, now India’s largest mobile payment service platform with over 100 million wallets & 10 million app downloads.
In 2015, it added booking bus travel. Paytm also launched movie ticket booking in early 2016.
In March 2015, industrialist Ratan Tata made a personal investment in the firm. The same month, the company received a $575 million investment from Chinese e-commerce company Alibaba Group after Ant Financial Services Group, an Alibaba Group affiliate, took 25 per cent stake in One97 as part of a strategic agreement.