Indian digital payment and commerce company Paytm on Tuesday opened the door of its Payments Bank in Noida, Uttar Pradesh. The Paytm Payments Bank will be the third payments bank of its kind in the country, following similar set ups by India Post Payments Bank Ltd And Airtel Payments Bank Ltd. Paytm’s parent organisation, One97 Communications Pvt Ltd will be investing roughly Rs 400 crore into the bank over the next two years to extend the business network of its payments bank. The Paytm Payments Bank comes under a new format of banks that have been approved by the Reserve Bank of India (RBI).
Now, the company aims to attract 500 million customers in the next three years and will offer 4% annual interest rate as well as cash back on deposits. The bank will charge zero fee for online transactions. This is the lowest interest rate among the three payments banks: Airtel Payments Bank offers about 7.25% interest per annum, while India Post offers 4.5% on deposits up to Rs. 25,000; 5% on deposits of Rs. 25,000-Rs. 50,000 and 5.5% on Rs. 50,000-Rs. 1,00,000 (annually). Backed by Chinese firm Alibaba and Japanese conglomerate SoftBank, Paytm’s payments bank targets to open 31 branches and 3,000 customer service outposts in its first year of operations, the company said. Paytm Payments Bank is offering the initial account services by invitation only.
“RBI has given us 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,” Paytm Payments Bank Chairman Vijay Shekhar Sharma said in a statement.
Here is a look at the products and services:
*Cashback of Rs 500 for first one million customers who give transaction more than Rs 50,000 into their Paytm Payments Bank account.
*The first million customers to open accounts with Rs 25,000 deposits, will get cash back of Rs 250 and the cash will be credited instantly to their account.
*Paytm has already forwarded messages to its 220 million subscribers who hold its mobile digital wallet, informing them about the payments bank services.
*Interested customers can log on to www.paytmpaymentsbank.com or download the iOS app to get an invitation for payments bank account opening.
*Customers will need to submit their e-KYC (Know your customer) documents for verification.
*Customers can open an account using their Aadhaar number and biometric credentials.
*Zero minimum balance requirements.
*Online transactions including RTGS, NEFT, IMPS etc will be offered free of charge.
*Physical services like chequebooks, demand draft and debit card will be available at a nominal fee, benchmarked to the industry. While virtual debit cards are free, the cheque book and physical debit card are chargeable at Rs 100. Similarly, e-statements and online passbooks are free but physical deliverables are priced at a fee of Rs 50 each.
*Under the new banking rules, bank accounts and wallets will be two separate entities. In order to be a part of the banking system, the user will have to open a bank account with Paytm separately.
*Payments banks can allow to deposit sums up to Rs 1 lakh per account.
*Like the other banking services such as debit cards, mobile banking and online banking will be made available in Paytm Payments Bank. For now, they will not be able to offer any loans or issue credit cards to their customers.
*Paytm Payments Bank can allow the provision of financial services like loans, insurance, pension funds and mutual funds among other services, by partnering with a financial organisation.
*Paytm Payments Bank would also offer RuPay debit cards to customers. “We will offer five free ATM transactions (in non-metro cities) per month. After that, customers will pay Rs 20 per ATM withdrawal,” the company said.
“We are very excited to launch Paytm Payments Bank and bring financial services to unbanked segment of Indians. Our ambition is to become India’s most trusted and consumer-friendly bank. Leveraging power of technology, we aim to become the preferred bank for 500 million Indians by 2020,” said Renu Satti, newly appointed CEO, Paytm Payments Bank.