Targeting 500 million customers by 2020, digital payments firm Paytm launched its payments bank on Tuesday with 4 per cent interest rate and cashbacks on deposits, zero fees on online transactions and no minimum balance requirement.
Backed by Chinese firm Alibaba and Japanese conglomerate SoftBank, the company has earmarked initial investment of Rs 400 crore to build its banking network over two years. Paytm is the third entity in the country to launch a payments bank after Airtel and India Post.
“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.
The company at present has around 220 crore customers who use its digital wallet. The wallets will be shifted to the payments banks and users will have to comply with ‘know your customer’ (KYC) norms for opening accounts.
The company is setting up KYC centres across India to assist its customers in opening accounts.