Digital payments firm, Paytm, on Tuesday launched its payments bank with 4 per cent interest rate and cashbacks on deposits, zero fees on online transactions and no minimum balance requirement. Paytm is targeting 500 million customers by 2020.
The company has designated an initial investment of Rs. 400 crore to build its banking network over two years. Paytm is presently backed by Chinese firm, Alibaba, and Japanese conglomerate SoftBank.
After the Reserve Bank of India granted in-principle licenses to 11 companies to open payments bank services in 2015, Paytm is the third entity to begin its operations. Airtel and India Post were the two other entities that have already begun their payments bank operations.
Paytm at present has around 220 million 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. KYC centres will be set up across India to assist customers with opening accounts.
Paytm plans to roll out 31 branches and 3,000 customer service points of the bank in the first year.
Users will continue to be able to use their Paytm Wallet in the same manner as before.
Paytm will offer virtual Rupay debit cards to customers immediately and physical card on request for withdrawing cash from any ATM in the country.