The Reserve Bank of India has asked e-commerce portal Paytm to revise its final application for payments bank. Sources in Paytm said that the delay was to give the central bank further details on distribution.
Sources in the RBI have told Newsd that the central bank was not comfortable with Paytm’s capital structure. Some government ministries have also raised a concern over a Chinese company having major shareholding in Paytm.
Paytm denied an earlier story carried by Newsd that said that the ecommerce platform had withdrawn its payments bank plans.
Over telephone and SMS, a company official told Newsd that Paytm is committed to starting a payments bank.
The company, however, refused to officially respond to the queries sent to it or to its PR agency.
Chinese firm Ant Financial Services Group, an Alibaba affiliate, in February had signed a deal to buy a 25% stake in Indian mobile payments and ecommerce platform Paytm owner One97 Communications.
On November 9 and 10, eyebrows were raised when Paytm put out front-page advertisements in newspapers, congratulating Prime Minister Narendra Modi on “taking the boldest decision in the financial history of independent India”.
In 2015, Paytm had received a license from Reserve Bank of India for starting India’s first payments bank. The bank intended to use Paytm’s existing user base for offering new services, including debit cards, savings accounts, online banking and transfers, to enable a cashless economy.
Payments banks are a new model of banks conceptualised by the Reserve Bank of India (RBI). These banks can accept a restricted deposit which is currently limited to ₹1 lakh per customer account. These banks cannot issue loans and credit cards. Both current account and savings accounts can be operated by such banks. Payments banks can issue services like ATM cards, debit cards online banking and mobile banking.
(An earlier version of this story was removed after Paytm refused to answer Newsd’s queries)