The payments bank accounts will initially be on an invite-only basis.

Paytm Payments Bank opens today aims to reach 50 million customers by 2020
Atom Payments Bank Tuesday, May 23, 2017 - 10:59

India’s largest digital wallet player Paytm has opened its payments bank. Starting operations on Tuesday, Paytm Payments Bank claims to be India’s first bank with cashbacks on deposits, zero fee on online transactions and no minimum balance.

The payments bank accounts will initially be on an invite-only basis and in the first phase, it will roll out its beta banking app for its employees and associates. Paytm users can request for an invite the Paytm Payments Bank website or on its iOS app.

Run by One97 Communications, it plans on rolling out 31 branches and 3,000 customer service points in the first year.

The company is in the process of setting up KYC centers across India to complete KYC for customers and make them eligible for a payments bank account.

Paytm says that this bank will be a mobile-first product with first-of-its-kind feature of cashback on deposits. Every customer that opens a payments bank account will receive a cashback of Rs 250 as soon they bring deposits of a total of Rs 25,000 in their bank account. The account will have zero balance requirement and every online transaction (such as IMPS, NEFT, RTGS) will be free of charge.

For savings accounts, the payments bank will also offer an interest of 4% per annum. The company will also offer current accounts to its millions of merchant.

It has a target of reaching 500 million customers by 2020.

“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 in to risky assets,” said Vijay Shekhar Sharma, chairman, Paytm Payments Bank.

Additionally, Paytm Payments Bank will be replicating Paytm’s zero cost QR Code-based payment solution in the banking sector with the idea to drive cashless transactions with the Paytm Payments Bank. 

Speaking on the launch of the payments bank, the newly appointed CEO of the payments bank Renu Satti, said, “We are very excited to launch Paytm Payments Bank and bring financial services to unbanked segment of Indians.  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.”

The current Paytm wallet will move to the Paytm Payments Bank in the same capacity. However, users will be able to use their Paytm wallet in the same manner as before.

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