You are here: Home » Companies » News » Telecom
Business Standard

Paytm to launch payments bank on May 23, transfer wallet biz to new company

The bank had received approval from the RBI last year, along with 11 others

Press Trust of India  |  New Delhi 

Paytm hits record 5 mn transactions a day

After months of delay, is now all set to commence its operations from May 23, having received the final approval from the Reserve Bank of India (RBI).

"...Ltd (PPBL) has received the final licence from the and would commence its operations on May 23, 2017," it said in a public notice.

The company will transfer its wallet business, which has over 218 million mobile wallet users, to the newly incorporated entity -- PPBL -- under the licence awarded to a resident Indian, Vijay Shekhar Sharma, the founder of Communications that owns

After May 23, the wallet will move to PPBL. In case consumers do not wish for that, they have to inform Paytm, which will in turn transfer the wallet balance to the consumer's bank account once such details are shared. Such communication will have to be made before May 23.

In case the wallet has been inactive with no activity in the last six months, the transfer to PPBL will only happen once the consumer gives specific consent.

Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account.

was earlier slated to begin operations around Diwali last year. In 2015, the had awarded in-principle approval to Sharma to set up a along with 10 others.

With the objective of deepening financial inclusion, kicked off 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 licensing.

Currently, Airtel and India Post are the only players that have started operations. Aditya Birla Idea is expected to launch services in the first half of this year.

Sharma will hold the majority share in Payments Bank, with the rest being held by Alibaba-backed Communications. However, the Chinese entity will not have a direct shareholding in the

Post the government's announcement of scrapping old Rs 500 and Rs 1,000 notes in November last year, has emerged as one of the main gainers as a huge number of people move towards digital currency. Wallet companies like and Mobikwik have registered spike in user base as well as the number of transactions.

First Published: Wed, May 17 2017. 10:10 IST