Paytm likely to launch the second payments bank in India, after Airtel

After Airtel Payments Bank, India's first payment bank, Paytm is all geared up to bring the country's second payments bank. Vijay Shekhar Sharma, founder and CEO of Paytm announced that Paytm Payments Bank has finally received launch approval from Reserve Bank of India.

In a blog post, Sharma said, “Today, Reserve Bank of India gave permission to formally launch Paytm Payments Bank. We can’t wait to bring it in front of you.”

Along with other 21 entities, Paytm had received in-principle approval for the payments bank in August 2015 from RBI. Though the digital wallet startup had been targeting a Diwali launch, the company missed the validity time period of 18 months twice.

Paytm is expected to roll out its payments bank in the next 30-60 days, in parts of Uttar Pradesh as a pilot project. After launch, the Paytm Payments Bank will be able to issue debit cards to users and allow account holders to transact through NEFT, RTGS and UPI.

According to the RBI guidelines, payment banks can hold up to Rs 1 lakh per customer. However, payments banks cannot issue credit cards or issue loans to customers. Also, the payments banks are allowed to invest the customer deposited money only into government securities.

Paytm Payments Bank, owned by One97 Communications will keep 49 percent of market share, whereas Sharma will be holding 52 percent, a majority share of the company.