One97 Communications Ltd., the parent company of e-commerce and digital payments service Paytm will merge its wallet service with Paytm Payments Bank Ltd., once it receives regulatory approval, the company said in a media statement on Monday. Vijay Shekhar Sharma, the founder of Paytm, will be the majority shareholder of the payments bank and owns the licence for it.
As per the directions of the Reserve Bank of India, the company would transfer its wallet business to the newly incorporated Paytm Payments Bank Ltd. after receipt of necessary approvals.Paytm Statement
Last year, Sharma, along with 10 other applicants received in-principle approval for a payments bank licence from the Reserve Bank of India. After missing subsequent deadlines, Paytm is in the final leg of launching the payments bank and is in the process of obtaining the final approval from the RBI, the company spokesperson said in an email response to BloombergQuint.
We are working hard towards the launch of the payments bank and expect to launch it in due time. We are working with Fidelity, Infosys, and Oracle to deploy a scalable platform that will be able to meet with the requirements of the bank when it launches.Paytm Spokesperson
The firm had incorporated the Paytm Payments Bank Ltd. and Paytm E-commerce Pvt Ltd. as separate entities in August. The company said Sharma will hold the majority share in the the payments bank, i.e., 51 percent. The remaining 49 percent is owned by One97 Communications.
As of now, Vijay Shekhar Sharma has made an investment of Rs 112 crore for his majority stake in the payments bank and the company is looking to raise additional capital, the spokesperson added.
Paytm has also issued a statement stating a user’s current wallet will move to the payments bank if the company doesn’t receive any communication from the user against the same by December 21.
“If the customer chooses not to use the Paytm wallet, he/she could send emails to their customer care emails addresses and notify the company of opting out. The balance in the wallet could then be redeemed by a one-time transfer to their own bank accounts,” the statement read. This amount will be eligible for interest payment, once the payments bank has been launched, said the company spokesperson.
Airtel Payments Bank Ltd became the first Indian payments bank last month to launch a pilot project in Rajasthan, luring customers with the offer of a hefty interest rate of 7.25 percent on savings accounts.