You are here: Home » Companies » News
Business Standard

Paytm bank offers 4% interest, cashbacks; wants to open 31 branches

Paytm is third firm after Bharti Airtel and India Posts to have launched payments banks.

Press Trust of India  |  New Delhi 


China's Alibaba-backed today launched niche payments bank, offering 4 per cent and cashbacks on as it looks to double its customer base to 50 crore by 2020.

Funded by Alibaba and Corp of Japan, India's largest payments startup will have no minimum balance requirements and all online transactions will be free, said in a statement.

While accounts will initially be available only through an invite, the will offer current account facility to merchants.

Paytm, which saw a phenomenal rise after Prime Minister Modi's shock ban of high-value currency notes in November last year resulted in crunch and boosted use of its electronic wallet, will invest Rs 400 crore to build its network over two years.

It will open 31 branches and 3,000 customer points in the first year.

is third firm after and Posts to have launched payments banks.

As many as 11 including Industries and India's top three telecom operators were in 2015 permitted by the Reserve of (RBI) to set up payments banks which can take and remittances but cannot lend.

"The RBI has given us an opportunity to create a new kind of model in the world. We are proud that our customer will be safely invested in government bonds, and be used for nation building. None of our will be converted into risky assets," Payments Chairman Vijay Shekhar Sharma said in a statement.

The company at present has around 22 crore customers who use its wallet. The 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 to assist its customers in opening accounts.

"Our ambition is to become India's most trusted and consumer-friendly Leveraging power of technology, we aim to become the preferred for 500 million Indians by 2020. We will invest over Rs 400 crore over the next two years to build network across the country," Payments CEO Renu Satti said.

In the first phase, the company will roll out its beta app for its employees and associates.

customers can request an invite through the Payments website or the application on Apple's iOS platform.

"This will be a mobile-first product with first-of-its- kind feature of cashback on Every customer, to open a Payments account, will get a cashback of Rs 250 as so they bring of a total of Rs 25,000 in their account.

"The account will have zero balance requirement and every (such as IMPS, NEFT, RTGS) will be free of charge," the statement said.

For savings accounts, the company would offer an interest of 4 per cent per annum. The company will also offer current accounts to its millions of merchants.

plans to roll out 31 branches and 3,000 customer service points of the in the first year.

Users will continue to be able to use their Wallet in the same manner as before, it added.

will offer virtual Rupay debit cards to customers immediately and physical card on request for withdrawing from any ATM in the country.

First Published: Wed, May 24 2017. 09:24 IST