197 Communications, the parent company of digital payments player Paytm, will be transferring the wallet business to the Paytm Payments Bank Ltd on 23 May, when the bank’s operations will be launched, the company has told its customers.
The Vijay Shekhar Sharma-founded company announced earlier this week that the payment bank was set to start operations on 23 May. Customers will have the option of discontinuing their wallet services by sending communication to the company (firstname.lastname@example.org) before May 23rd.
The wallet money will be transferred to the Paytm Payments Bank once the wallet business becomes part of the new company.
One97 had said in December that it was preparing to merge its wallet business with the payment bank once it received regulatory approval. Earlier this week, Paytm announced that it had received the final license from the Reserve Bank of India for its payments bank entity. Paytm will kick off its payment bank operations next week under long time executive and vice president Renu Satti, who will be the CEO of the payment bank.
With the payment bank, Paytm will also be able to meet the expected RBI guidelines for full KYC for wallets, since the bank will do full KYC for its customers any way while opening their bank accounts. The new RBI guidelines are expected by the end of the month.
The announcement of the payment bank’s launch came just ahead of Paytm announcing its $1.4 billion fundraise from Soft Bank on Thursday, the largest such infusion of capital by a single investor in an Indian digital company.
Sharma told ET (Economic Times) that the company was planning to invest approximately $1.6bn over the next three to five years towards getting half a billion Indians on board.
While the payment bank cannot do any lending, Sharma said the bank will partner with various lenders and insurance companies and make them available to consumers and small businesses.