Paytm, the digital wallet and e-commerce company, is looking at a summer launch this year. 'Project Pokhran', as the company calls its payments bank project internally, is in full swing to hire professionals and set up offices for the new business. EY (earlier Ernst & Young) and McKinsey & Co are advising Paytm for the banking foray.
Vijay Shekhar Sharma, founder and chief executive of One97 Communication that runs Paytm, is one of the 11 to get permission from the Reserve Bank of India (RBI) last year to open payments bank. It is learnt that the RBI is fine-tuning its own systems for the new stream of business before the companies can take off.
Paytm, which had wanted to roll out its bank by April 2016, may now launch a few months later than that once the RBI gives its go-ahead, a source said. A few other companies are also believed to be ready for launch but will wait at least till summer. Sharma refused to comment on the timing of the launch. He had earlier said that an investment of Rs 1,200 crore was planned by his group for a three-year period for the bank.
Even as Paytm was toying with the idea of setting up its banking headquarters either in Mumbai or Bengaluru, it has now decided to stay put in Noida (NCR), next to New Delhi. Currently, the company has three offices in Noida spread over more than half a million sft. It also has offices across Mumbai, Bengaluru, Chennai and Kolkata.
Paytm may announce the name of the head of the banking business in February and the probable candidate is from the consulting world, Sharma told Business Standard. Before announcing the name, Paytm has to seek RBI permission.
Among the senior executives who've already joined Paytm for the banking business include Kshitij Sanghi, who was earlier employed with McKinsey. Sanghi will look at the technology side as a vice president. A former BCG employee, Narendra Singh, has been hired as deputy general manager for a role in project management. Also, Varun Khullar, who worked for ITC earlier, has joined as vice president to look at partnerships. Vikas Purohit, formerly with Amazon, is also a vice president and is looking at branch and business correspondent network.
Paytm plans to set up around 20 signature branches for the payments bank. In addition, there will be 200 smaller store-like branches and at least 1,000 agents.
In August 2015, RBI allowed 11 business houses and entities to start a payments bank. The others are Reliance Industries, Aditya Birla Group, Bharti Airtel, Vodafone, the department of posts, Cholamandalam Distribution Services, Tech Mahindra, National Securities Depository, Fino PayTech and Dilip Shangvi, chairman of Sun Pharmaceutical.
The entities, which got permission from the RBI, must have an initial capital of Rs 100 crore each and will have to start operations within 18 months, the central bank had said in August 2015.