With the offering of 4 percent interest rates on its bank accounts Paytm became the third entity in India to launch payments banks after Airtel and India post. Paytm Payments Bank will be headed by Renu Satti as CEO.
It will launch its first phase on Tuesday by offering accounts on an invite basis only. They are focusing on mostly north Indian customers in the first phase. Investment plans are around RS 400 crore (as per sources) for establishment of this banking network in the time span of two years. Chinese company Alibaba and japanese conglomerates SoftBank have their fair share in initial investments. Paytm payments bank is all set for its first branch in Noida. In its first year, Paytm plans to expand to 31 brick-and-mortar branches and add 3,000 customers. By 2020, it plans to add 500 million customers.
The companies have plans to give cashback of RS 250 instantly for the first one million customers as soon as they deposit RS 25000 in their account.
In a press release paytm stated that, they will be launching its beta banking app for its employees and associates. Paytm customers can request an invite by going to PaytmBank or on the Paytm iOS app.
“RBI has given us an opportunity to create a new kind of banking model in the world. We are proud that our customer deposits will be safely invested in government bonds, and be used for nation building. None of our deposits will be converted into risky assets,” Paytm Payments Bank Chairman Vijay Shekhar Sharma said in a statement.
Paytm will offer virtual Rupay debit cards to customers immediately and physical card on request for withdrawing cash from any ATM in the country, which can be used for five free ATM cash withdrawals in non-metro cities per month after which they will be charged Rs 20 per withdrawal. The company will have a zero balance requirement and will offer online transactions such as IMPS, NEFT, and RTGS free of charge. Payments banks can accept Rs 1 lakh per account.
In the past 48 hours, paytm has sent out messages to its 220 million users, asking them open a payments bank account. However, company officials said those who do not wish to open an account have to only send an email and can continue to use the wallet as it is.