Paytm has announced that it has a license to run a payments bank. This was announced on Tuesday. Vishal Shekhar, founder of Paytm tells that he would take up the executive role at the payment bank after being approved by the RBI.
He also wrote in a blog;
Our aim is to build a new business model in the field of banking, focus on to bring new financial services to 100s of millions customers those are either un-served or undeserved Indians.
Paytm payment means?
It allows customers to open bank accounts. In your bank account, you can’t deposit not more than 1 lakh will be present. It is expected to cater to people with no bank accounts like, migrant laborers, small businesses and the informal sector.
What happens to the Paytm Wallet?
The Paytm wallet can be connected with the Paytm payment bank. Additionally, the bank holders need to provide the Know Your Customer (KYC) documents to open a bank account with the Paytm payment bank. Once, the documents are provided, they are can transfer their money from a bank account to the wallet and can use whenever it’s necessary.
Moreover, you can withdraw cash from their accounts using ATM cards provided by the Payment Bank.
Services provided by the Paytm Payment Bank?Once, the Paytm Payment starts, they can allow people to open their bank accounts and can make the suitable transactions. No bank accounts will have a deposit of more than 1 lakh.
The banks will provide interests upon savings, just like the other banks. However, if a person wants to deposit more than 1 lakh in the bank, then they need to open a new account in a big bank. Issue of ATMs and debit card will be also available. It allows customers to pay their utility bills through a payment bank.
Account holders can also withdraw cash from their accounts using ATM cards. You can also walk to the stores and withdraw cash using ATM cards.
Moreover, it can able to distribute financial services like mutual funds and insurance products for its users in order to tie up with the financial services company providing these products.
Despite many advantages, it can’t give loans to the customers and not even credit cards are acceptable. No NRIs can deposit their cash into these bank accounts.