Paytm has rolled out its Payments Bank operations by launching its first physical branch in Noida. With this launch, there are three payments bank operational in the country, the other two being Airtel Payments Bank Ltd and India Post Payments Bank Ltd. The Paytm Payments Bank will be the first bank in the country to offer cashbacks on deposits.
As a Payments Bank, Paytm will be able to accept deposits upto Rs 1 lakh per customer in wallet and savings/current accounts. Further it can also offer other services like Debit Cards, Online Banking and Mobile Banking. It will not be allowed to lend to customers. However, it will be able to offer financial products like loans, insurance, mutual funds, pension funds etc by partnering with other financial institutions and banks.
Other Salient Features
Paytm Payments Bank will offer 4% interest on savings account in line with the interest rates of all leading commercial banks including State Bank of India, Bank of Baroda and ICICI Bank Ltd, which also offers 4% interest rate on savings account deposits.
Cash withdrawal charges
Customers will be given five free transactions in non-metro cities and three free transactions in metro cities. After the exhaustion of free limits, customers will be charged Rs 20 for each subsequent cash transactions.
The customers will be offered a Rupay debit card at an annual subscription cost of Rs 100 plus delivery charges. The bank will also provide a cheque book at a cost of Rs 100.
Online fund transfer
Paytm Payments Bank will provide services such as Immediate Payment Service (IMPS), Unified Payment Interface (UPI) and National Electronic Fund Transfer (NEFT) free of cost to its customers.
The Reserve Bank of India (RBI) had given in principle approval to Paytm Payments Bank Ltd, an entity majority owned by One97 Communications earlier this year. In 2015, RBI had awarded ‘in-principle’ approval to Vijay Shekhar Sharma to set up a Payments Bank along with 10 others with an objective of deepening financial inclusion. The Paytm Payments Bank aims to plans to roll out operations in 31 branches and 3,000 customer service points in the first year.