India’s leading digital wallet player Paytm has received the final approval from the Reserve Bank of India (RBI) and is set to launch Paytm Payments Bank on 23 May, its holding company One97 Communications Pvt. Ltd said on Wednesday.
Renu Satti, vice-president of business at Paytm, will take over as the chief executive officer (CEO) of Paytm Payments Bank, the company said. Shinjini Kumar, who was hired in February last year by Paytm to lead the payments bank, is on her way out, according to people directly involved in the matter. Kumar was a former senior executive at the Reserve bank of India.
Satti has been with Paytm for nearly a decade now and started out as manager of human resources at One97 Communications. Since then she has worked on several projects, including Paytm marketplace and the wallet business.
One97 Communications founder and CEO Vijay Shekhar Sharma was among the 11 applicants to receive RBI’s in-principle nod for a payments bank licence in November 2015.
In January, Paytm had said it received the final approvals from the RBI and was planning to start payments bank in one or two months, but the launch was delayed. In the same month, Bharti Airtel Ltd started operations for Airtel Payments Banks, a joint venture between Bharti Airtel Ltd and Kotak Mahindra Bank Ltd.
Paytm said that all active wallet accounts on the payments app will be transferred to the payments bank. “As per the directions of RBI, the company will be transferring its wallet business to the newly incorporated payments bank entity, Paytm Payments Bank Ltd, under a payment bank licence awarded to a resident Indian, Vijay Shekhar Sharma,” it said in a statement.
Paytm will allow users, who do not wish to transfer their accounts, to opt out through a written request, while for accounts dormant for six months and having zero balances, Paytm will transfer wallets only when the user notifies it to do so. Such communication will have to be made before 23 May.
Paytm Payments Bank has set itself a target of 200 million accounts, across current and savings accounts, and mobile wallets, within 12 months of the launch. It aims to touch half a billion accounts by 2020. Paytm has close to 218 million wallet accounts.
Sharma along with his firm One97 Communications have together invested Rs220 crore in Paytm Payments Bank to date. Sharma owns 51% stake in the bank, while the rest is held by One97 Communications.