Paytm, an Indian electronic payment services and e-commerce platform that is backed by China’s Alibaba Group, aims to create the world’s largest digital bank with 500 million accounts.
On Tuesday, the group formally launched Paytm Payments Bank, targeting people who don’t have access to professional financial services, Bloomberg reports.
The move was part of a plan to build Paytm into an integrated online financial services group that offers everything from wealth management to bank cards and stock market trading.
“We are unveiling our money market fund, launching our debit card and we’ll have the capabilities to allow enterprises to open business accounts,” group founder Vijay Shekhar Sharma was quoted as saying in a phone interview.
“Digital payments were our entry point; we want to become a vertically-integrated financial services company.”
Paytm Payments Bank, which was inaugurated in New Delhi, will operate as a mobile-first bank with zero fees on online transactions and no minimum balance. It will also offer free personalized RuPay digital debit card for online transactions.
The bank is majority-owned by Sharma. One97 Communications, which operates Paytm and is backed by Alibaba Group and Jack Ma’s Ant Financial, holds the remaining 49 percent, according to the Bloomberg report.
The digital bank aims to offer services to bring half-a-billion Indians into ‘mainstream economy’. That will be in line with Indian Prime Minister Narendra Modi’s ambition to broaden banking services reach in the world’s second most populous nation.
Paytm was one of fewer than a dozen entities that secured permits to start payments banks, which can accept deposits and remittances but cannot lend.
As a way to bypass the regulatory hurdles that bar lending, shareholder One97 Communications will introduce a charge card and offer monthly installment-based loans, according to Sharma.
“We will launch share trading and insurance products very soon,” he told Bloomberg. “We want to become an internet-age financial services company.”
“We invest deposits only in government bonds. None of your deposits will be converted into risky assets,” the company said in a press release.
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