Paytm Payments Bank cuts interest rate on savings account deposits to 3.5 pc

Paytm Payments Bank (PPB) on Thursday has reduced interest rate on savings account deposits by 50 basis points to 3.5 per cent, with effect from November 9.

The payments bank also announced a fixed deposit scheme, on which its customers can earn an interest of up to 7.5 per cent on their deposits though PPB's partner bank.

"The RBI (Reserve Bank of India) recently cut the repo rate by 25 basis points (bps) to 5.15 per cent, which takes its cumulative cuts so far in the last 12 months to 135 basis points, which has prompted this move," Satish Kumar Gupta, managing director and chief executive officer of Paytm Payments Bank, said in a statement.

PPB said it will also launch on-demand FD in early November that will enable the savings account customers to create a fixed deposit with their partner bank, irrespective of the quantum of their investment.

"Our offering of on-demand FD will enable our customers to create fixed deposits -- starting from as low as Re 1 -- and earn an interest of up to 7.5 per cent (as of October 10, 2019). They can instantly redeem the partial or complete amount from their fixed deposit at any time free of charge," Gupta said.

As of April 2019, the Paytm Payments Bank claims to have over Rs 500 crore deposits in savings accounts, making it the largest payments bank in India in terms of deposits.

PPB aims to increase the monthly processing of savings account payments from Rs 24,000 crore to Rs 40,000 crore in the current financial year.