Reserve Bank of India(RBI) has given final approval to Paytm to launch Paytm Payments Banks. The company is set to launch Paytm Payments Bank on 23rd May 2017, its holding company One97 Communications Pvt. Ltd said on Wednesday. Vijay Shekhar Sharma – Founder and CEO of Paytm is awarded with the payments bank licence. Under this licence the company will transfer its wallet business to the newly incorporated payments bank entity, as per the guidelines of Central Bank.
Customers using the payment wallet will see it move to the Paytm Payments Bank Limited in the same capacity and have the option of discontinuing their wallet services with due communication sent to the company by May 23rd.
Here’s what you need to know about Paytm Payments Bank
What will happen to the money in Paytm wallets?
The money will be transferred to the Paytm Payments Bank Limited as the wallet business will become part of the new company. It will happen automatically, and you need not do anything.
Will the Paytm app change?
No. The user experience will remain the same as the app will continue to work as it does. You will continue to use it to pay for taxi, fuel, food, etc. the same way.
What will change then?
The wallet business will get transferred to the new company but will keep running as it is.
Will I get a bank account number, chequebook , debit card, etc.?
Only if you opt to open an account with the new payments bank of the company. Otherwise, your wallet will keep working as it is. The company will give you an option to open a separate account. You will earn interest on your money if you choose to open a payments bank account.
How is a payments bank different from the usual bank?
A payments bank cannot lend or give advance to customers. It can issue cheque books and debit cards but not credit cards. There is a limit on the money you can keep in your account. You cannot keep more than Rs 1 lakh in the Paytm payments bank. The purpose behind these banks is to provide quick and basic banking services to the people at the bottom.
Source: Economic Times