The company's Paytm Payments Bank has just announced the appointment of a new chief executive officer and will launch operations on May 23. Paytm was earlier slated to begin its payments bank operations around Diwali previous year after getting an in- principle approval from RBI in 2015.
Softbank's investment comes as payments opportunity has got a further boost after government's push for digital transactions since demonetisation in November past year.
Paytm was launched in August 2010 as an online recharges and bill payments platform and soon expanded into online commerce and mobile payments through wallets. The Reserve Bank had received 41 applications for payments banks, of which 11 were granted an in-principle nod.
The founder of Paytm Vijay Shekhar Sharma was quoted earlier this year as saying "Our aim is to build a new business model in the banking industry, focussed on bringing financial services to 100's of millions of un-served or underserved Indians".
As per advertisement put out by the company, users will be moved to Paytm's Payments Bank. Your money will be transferred to the Paytm Payments Bank Limited automatically.
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Now, Paytm has today released a public notice that states that Paytm Payments Bank will be starting operations officially on May 23, which is only six days from now.
Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account. The amount can be transferred to his/her bank account after the user provides the name of the account holder, account number and IFSC code. Currently, Paytm has around 218 million wallet accounts. This will help Paytm pre-empt possible government concerns about a Chinese company having a strong hold on Paytm and the financial services sector which is considered a strategically important sector.
Payment banks are seen as a growing opportunity in a country with plenty of smartphones but with millions of Indians who lack formal access to banking services.
With SoftBank coming on board as one of the primary investors for Paytm, the consolidation process being pushed forward by the Japanese telecom giant could get a definite push.