Paytm Payment Bank is to become the largest digital bank. It is planning to expand in other sectors, as well as to attract 500 million new account holders.
Paytm Payment Bank is to become the largest digital bank. It is planning to do this by having 500 million account holders as well as diversifying its financial services. The areas the bank wants to venture in more include provision internet-based financial services in areas such management of wealth, enabling use of credit card as well as stock market trading.
In a bid to reach this goal, the bank, through this initiative launched on Tuesday, will reach out to to the section of the population that do not have access to financial services of professional standing. This is also the vision that Prime Minister Narendra Mody had in mind as far as the 1.3 billion of the population who have limited access to financial services are concerned.
According to the founder Vijay Shakhar Sharma, the bank unveiled its money market fund, debit card and also enabled enterprises to open their bank accounts. He said this in an interview conducted at the same time as the official launch which was graced by finance minister Arun Jaitley in New Delhi.
The Government of India has been in the forefront in supporting digital banking. This is through initiatives such as digital lockers as well as authentication of identity through digital identity program, Aadhaar. Paytm is one among the few entities that were given a green light to provide payment services. However, they cannot lend.
The bank said it will operate an account that does not charge any fee for transactions done online. In addition, it will remove account balance restrictions. Sharma is the majority shareholder in Paymt. The remaining stake is owned by One97 communications which run the bank and supported by Alibaba Holdings Ltd. Jack Ma’s Ant Financial also has a stake. The bank came from Paytm digital wallet and mainly grew as a result of the withdrawal of most of the high denomination bills from circulating in the economy.
Sharma also added that One97 will also facilitate the launching of recharge card as well as loans based on monthly installments. This is a big step that sidesteps the lending regulations put in the country. The bank will also venture into share trading and also deal in insurance products in its quest to be the most advanced internet based bank in the country.
He also maintained that the bank will also provide financial services to low-income earners as opposed to the traditional banking which mostly favored the rich. Paytm will use widespread use of internet-enabled smartphones in a bid to increase this digital banking objective. He believes the success will be as a result of the fact that other financial institutions have not expanded access to digital banking.