Paytm payments bank to miss Diwali date

Paytm is still awaiting the final clearance from the RBI

Mobile wallet company Paytm is likely to miss the Diwali target for commercial launch of its payments bank as it is still awaiting the final clearance from the Reserve Bank of India (RBI). 

“We’re awaiting the final application approval from RBI. We have everything ready. As soon as the approval comes, we will do a ‘beta’ launch of the bank, which is within the company. By the end of the year, we will have a commercial launch of the payments bank,” Vijay Shekhar Sharma, founder and chief executive officer of Paytm, told Business Standard in a telephone interview. 

Paytm has shifted its deadline for opening its payments bank thrice since April. Sharma, who has got the licence in his name, is expecting the launch by the year-end. 

Paytm, which was among the 11 recipients of payments bank licence, plans to start the project with an initial capital of Rs 300 crore. After the initial euphoria, three out of the 11 recipients withdrew their applications. However, Paytm hopes to make it one of the biggest businesses in its portfolio and the second largest revenue earner after wallets. 

Sharma said the company would soon announce the board of directors for its payments bank. 

The One97 Communications-run online mobile wallet had in August hived off its e-commerce and payments bank businesses into separate companies, filings with the Registrar of Companies show. A separate e-commerce business would make a possible joint venture with Chinese major Alibaba easier to execute, analysts said. 

Paytm is also strengthening its parent company’s board of directors, with experienced professionals, who have had long stints with global giants such as Google and Goldman Sachs. 

“We want to make Paytm the benchmark of world-class companies and be a premier financial service company. The idea is to dominate in India in a year or so and later take Paytm abroad. And, our board with their experience would help the company achieve scale. It would also help us when we go to investors to raise money a few years down the line,” Sharma added. 

In the most recent board announcement, Mark Schwartz, vice-chairman of the Goldman Sachs Group and chairman of Goldman Sachs in the Asia-Pacific, joined the company. 

Schwartz, who is currently based in Beijing, has been a member of Goldman’s management committee. He played a major role in helping Alibaba founder Jack Ma and executive vice-chairman Joseph Tsai with Alibaba’s $25-billion initial public offering in New York in 2014. 

Last week, Amit Singhal, former head of Google Search, joined Paytm’s board of directors. Singh was instrumental in shaping Google Search to seamlessly work across desktop, mobile and other devices. A Google Fellow, and former head of the core ranking team, he served for 15 years in the company.