Today, Paytm payment bank commenced its operations after having received the final approval from the Reserve Bank of India (RBI). The wallet business (over 218 million mobile wallet users) of the company will be transferred to the newly incorporated entity PPBL under the payments bank licence awarded to a resident Indian, Vijay Shekhar Sharma, the founder of One97 Communications that owns Paytm.
What is a payment bank?
Payment banks were designed to help low income households, migrant workers and small businesses to get access to financial services, which they currently don’t have access to
Based on guidelines issued by RBI on payments banks in 2015, the following activities can be undertaken by the payments bank
- Enable money transfers and remittances through a mobile phone.
- Offer services of automatic payments of bills and e-wallet facilities
- Issue debit cards and ATM cards
- Transfer money directly to bank accounts at nearly no cost.
Key features of paytm payment bank
- A zero balance requirement
- offer online transactions such as IMPS, NEFT, and RTGS free of charge.
- Offer an interest of 4% per annum for savings accounts.
- Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account.
- The payments bank will also offer RuPay debit cards to consumers, which can be used for five free ATM cash withdrawals in non-metro cities per month after which they will be charged Rs 20 per withdrawal.
Can I open the account with Paytm payments bank
- Initial account openings on ‘invite only’ basis with Rs 250 cashback on opening bank accounts
- First one million customers to open a payments bank account and reach a deposit of Rs 25,000 will get a cashback of Rs 250 instantly.
- You can request an invite by logging onto www.paytmpaymentsbank.com or through the Paytm app
As paytm becomes bank: What will happen to your money in the wallet
The wallet balance will convert automatically into account balance, if you choose to open an account. The same balance will be used to pay for various services like Uber ride, bills, recharges and online shopping as earlier.
Other payment bank providers
Currently, Airtel and India Post are the only players that have started Payments Bank operations. Aditya Birla Idea Payments Bank is expected to launch services in the first half of this year.
Is paytm better than other payment banks
- Interest on deposits is at Paytm Payments Bank is much lesser than other payments bank, at 4% while Airtel Payments bank is offering its customers 7.5% interest, India Post said it would provide 5.5% interest and Mobikwik said that it would offer up to 6% interest on deposits.
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