Indian payment and commerce giant Paytm is finally set to commence its payments bank operations from May 23, after months of delay. It is also been ascertained that final approval has been made from the Reserve Bank of India (RBI).
"...Paytm Payments Bank Ltd (PPBL) has received the final licence from the RBI and would commence its operations on May 23, 2017," it said in a public notice.
The company is all set to transfer its wallet business, which has over 218 million mobile wallet users, to the recently incorporated entity -- PPBL -- under the payments bank licence awarded to a resident Indian, Vijay Shekhar Sharma, the founder of One97 Communications that owns Paytm.
The Paytm wallet will move to PPBL after May 23. But in any case if the consumers do not wish for that, they have rights to notify Paytm, which will in turn help transfer the wallet balance to the consumer's bank account once such details are shared. Such communication should be made before May 23.
In any case if the wallet had been inactive from six months, the transfer to PPBL will only ensue once the consumer gives precise permission.
Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account. Paytm was previously schedule to start its operations around Diwali last year. In 2015, the RBI had rewarded in-principle support to Sharma to set up a payments bank along with 10 others.
RBI jerks off an age of differentiated banking by allowing SFBs (small finance banks) and PBs (payments banks) to start services, with an objective of deepening financial inclusion. As of now, total of 21 entities were given in-principle nod last year, including 11 for payments banks.
Later, the three entities like 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.
The majority of shares will be held by Sharma in Paytm Payments Bank, while the rest will be apprehended by Alibaba-backed One97 Communications. Though, the Chinese unit will not have a straight shareholding in the payments bank.