Digital payments firm Paytm on Tuesday launched its payment bank with 4 % interest rate and cashback on deposits, zero fee on online transactions and no minimum balance requirement, as they seek to attain a target of 500 million people by 2020.
The firm is backed by Chinese firm Alibaba and Japanese conglomerate SoftBank and has successfully earmarked initial investment of Rs 400 crore to build its banking network over the past two years. Paytm is the third entity in the country to launch a payments bank after Airtel and India Post.
“The 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.
Many customers of the company use its digital wallet. These wallets will be shifted to the payments banks and users will have to comply with ‘know your customer’ (KYC) norms for opening accounts. The company is setting up KYC centres across the country to help the customers in opening accounts.
“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.
We will invest over Rs 400 crore over the next two years to build banking network across the country,” Paytm Payments Bank CEO Renu Satti said.
Paytm Payments Bank accounts will initially be available on an invite-only basis. In the initial phase, the company will roll out its beta banking app for its employees.
The customers can request an invite through the Paytm Payments Bank website or the Paytm application on Apple’s iOS platform.