Indian digital payments firm Paytm has officially launched a niche payments bank as part of its drive to double its customer base to 500 million over the next three years.
The payments bank operates 31 branches and 3,000 customer points in its first year, the company noted in a release. Payments banks can take deposits but cannot make loans. Paytm’s bank will offer an interest of 4 percent a year on savings accounts and also provide current account facilities to merchants. It will have no minimum balance requirements, and all online transactions will be free.
The goal, according to Paytm, is to reach the tens of millions of customers in the nation who regularly use mobile phones and cheap data services but who do not have access to regular banking services.
Paytm has recently seen its fortunes greatly buttressed by the Indian government’s decision to ban high-value currency notes late last year. That resulting cash hole in the economy has pushed millions onto digital wallets over the last several months — as of last official count, Paytm says more than 220 million clients use its e-wallet.
Paytm also has some fairly famous investors — last week, Japan’s SoftBank invested $1.4 billion in Paytm’s parent, One97 Communications.
Initially, bank accounts will only be available by invite.