Paytm Payments Bank (PPB) will stitch together multiple partnerships with full fledged commercial banks for different products as it seeks to tide over restrictions associated with a payments bank license.
It's most recent tie-up announced over the weekend allows deposits of more than Rs 1 lakh to automatically convert into fixed deposits with IndusInd Bank.
Vijay Shekhar Sharma, chairman and majority owner of PPB said “This will provide our customers a safe, super-liquid and high yielding option for investments which can be redeemed instantly. This is an exclusive tie-up with IndusInd for this product. Going forward, we expect to have many such partnerships with different banks for ATMs and debit cards because we want to build multiple relationships and also give our customers options. The conversion from wallet to bank is happening rapidly. We already have 50 million customers who are KYC compliant which makes them potential future bank customers.
The Reserve Bank of India (RBI), however, allows these banks to tie up with full-service lenders as a banking correspondent, whereby they can channel business they cannot do.
The tie-up with IndusInd will allow PPB to channel deposits in excess of Rs 1 lakh to IndusInd for a fee.
This is Paytm’s second tie-up with a full-service lender. In November, Paytm announced an agreement with ICICI Bank, wherein people shopping on the Paytm platform were eligible to get a Rs 20,000 loan from ICICI free of interest for 45 days and charged at credit card rates after that.
Renu Satti, CEO at PPB said “We plan to have 31 operational branches by the end of 2018, which will support 1 lakh outlets. RBI norms now allow us to do all things through an outlet but we need branches to support it”.
Other operational payment banks include the ICICI-backed Fino Payments Bank, Airtel Payments Bank in which Kotak Mahindra has a 20% stake, and India Post Payments Bank backed by the government.