JOIN USPaytm, the largest digital payment startup, backed by Chinese firm Alibaba and Japanese conglomerate SoftBank, on Tuesday launched payments bank in Noida with 4% interest rate and cash backs on deposits.
Speaking at the launch of the payments bank, Paytm Payments Bank Chairman Vijay Shekhar Sharma said the Reserve Bank of India (RBI) has given the company an opportunity to create a new kind of banking model in the world.
“We are proud that our customer deposits will be safely invested in government bonds, and be used for nation building. None of our deposits will be converted into risky assets,” he said.
Paytm Payments Bank accounts will initially be available only through an invite and it will also give current account facility to merchants. Also, it offers no minimum balance requirements and all online transactions free of cost.
The company, at present, has around 22 crore customers who use its digital wallet. The wallets will be shifted to the payments banks and users will have to comply with ‘know your customer’ (KYC) norms for opening accounts.
Paytm is the third company to start the payments bank after Bharti Airtel and India Post after RBI gave permission to 11 companies to start it in 2015. As per the RBI directive, these payments banks can take deposits and remittance but can not lend.
The company stated that Paytm Payments Bank has been designed to help achieve financial inclusion in the country and is in line with Paytm’s mission of bringing half a billion Indians into the mainstream economy.
On the launch of the bank, Paytm Payments Bank CEO Renu Satti said the company is very excited to launch Paytm Payments Bank and bring financial services to the unbanked segment of Indians.
“Our ambition is to become India’s most trusted and consumer-friendly bank. Leveraging the power of technology, we aim to become the preferred bank for 500 million Indians by 2020,” she said.