RBI grants scheduled bank status to Paytm Payments Bank
The scheduled bank status will help Paytm Payments Bank expand its sources of revenue.
Paytm Payments Bank Limited (PPBL), a group company of listed entity , said that it has been approved as a scheduled payments bank by the Reserve Bank of India (RBI) on Thursday. This will help PPBL expand its business opportunities.
As a scheduled payments bank, PPBL can now participate in Request for Proposals (RFP) advertised by the government and other large corporations, primary auction, fixed-rate and variable rate repos and reverse repos, apart from participation in Marginal Standing Facility. It will also be eligible to partner in government-run financial inclusion schemes, said PPBL in a statement.
“It is our constant endeavour to bring better banking services for Indians to drive financial inclusion in the country. We have witnessed a fast adoption of digital banking services, with users appreciating the new era of banking in India. The inclusion of Paytm Payments Bank in the Second Schedule to the Reserve Bank of India Act, 1934, will help us innovate further and bring more financial services and products to the underserved and unserved population in India,” said Satish Kumar Gupta, Managing Director and CEO of PPBL, in the statement.
Satish Kumar Gupta, the new MD and CEO of Paytm Payments Bank.
At present, PPBL offers digital banking products for individuals, small and medium enterprises as well as large corporates spanning current account, savings account, salary accounts, fixed deposits and issuance of debit cards. PPBL also offered services offered by listed entity Paytm such as digital lending, FASTag services, and others.
Officially launched in 2017, PPBL earlier couldn't provide advance loans or issue credit cards, as per RBI’s mandate for payments banks. PPBL is among the six functioning payment banks in India. RBI had granted in-principle approval to 11 such entities but many of them shut down, citing restrictions on revenue due to regulatory mandates.
According to filings made by Paytm ahead of its IPO in November, PPBL earned revenues of Rs 863.4 crore for FY 2020-21, as compared to Rs 875.2 crore in the previous financial year. One 97 Communications holds 49 percent stake in PPBL and the rest is held by Vijay Shekhar Sharma, Founder and CEO of Paytm.
Edited by Kanishk Singh