India’s most popular digital wallet player Paytm has received the final licence from the Reserve Bank of India (RBI) and is all set to commence operations on May 23, 2017.
In a public notice issued by the company, it said that as per RBI’s directions, Paytm will be transferring its wallet business to the newly incorporated Payments Bank entity, Paytm Payments Bank.
Paytm has appointed Renu Satti as the CEO of the payments bank. Renu was earlier heading Paytm’s movie ticketing business.
Paytm founder Vijay Shekhar Sharma received an in-principle approval from RBI to set up a payments bank in 2015.
Users of Paytm wallet will now move to Paytm Payments Bank in the same capacity. But if a customer does not want to move to the payments bank, it has to communicate the same to Paytm before May 23.
It has also given users the choice of opting out of Paytm wallet and redeeming their balance by a one-time transfer to your own bank account.
If you do not communicate to Paytm, but fail to communicate the same to the company, the money in the wallet will be kept in a specially designated account with Paytm Payments Bank and the funds can be accessed by giving Paytm your bank details.
But if your wallet has been inactive for the last six months with zero balance, it will be transferred to the Paytm Payments bank only if you give specific consent for the same.
As per a Hindu Business Line report, Sharma will hold the majority share in Paytm Payments Bank and the rest will be held by Alibaba. However, Alibaba will not have a direct shareholding in the payments bank.
As per RBI guidelines, Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account.
RBI awarded payments banks licenses to 10 entities subject to in-principal approvals in 2015. Airtel and India Post are the only ones who commenced operations. While Paytm’s payments bank will launch on May 23, Aditya Birla Idea Payments Bank is expected to launch services in the first half of this year.
However, three of these, Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services backed out.