Post receiving the approval from the Reserve Bank of India (RBI), the mobile wallet brand faced a delay of months in commencing the operations of its payments bank.
”…Paytm Payments Bank Ltd (PPBL) has received the final licence from the RBI and would commence its operations on May 23, 2017,” said an official communiqué by Paytm.
The company has decided to transfer its wallet business to the newly set up entity — Paytm Payments Bank Limited (PPBL), under the payments bank licence awarded to Vijay Shekhar Sharma, the founder of One97 Communications that owns Paytm, reported The Hindu.
The company has over 218 million mobile wallet users.
After May 23, the Paytm wallet will shift to PPBL. In case the users do not wish for that, they need to inform the company, which will then transfer the wallet balance to the consumer’s bank account.
All the communication pertaining to the development will be made before May 23.
If case the wallet has been inactive in the last six months, the transfer to PPBL will happen only once after the consumer’s consent.
As per RBI’s guidelines payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account.
The central bank had awarded the in-principle approval to Paytm to set up a payments bank along with 10 others in 2015.
With the objective of enabling financial inclusion, RBI started an era of differentiated banking by allowing SFBs (small finance banks) and PBs (payments banks) to start services. A total of 21 entities were given in—principle nod last year, including 11 for payments banks.
Later, three entities, Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services backed out of the payments bank licensing.
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.