Paytm Launches Payments Bank

–>Paytm has come out with Payments Bank operations by launching its 1st physical branch in Noida.
–>Along with this There are three payments bank operational in the country, the other two are Airtel Payments Bank Ltd & India Post Payments Bank Ltd.
–>This will be the first bank in the country to offer cashbacks on deposits.

Significance

–>In this Bank, Paytm will be able to accept deposits upto Rs 1 lakh per customer in wallet & savings/current accounts.
–>It can also offer other services like Debit Cards, Online Banking and Mobile Banking.It will not be allowed to lend to customers.
–>It will be able to offer financial offers like loans, insurance, mutual funds, pension funds etc by partnering with other financial institutions & banks.

Other Salient Features
Interest Rate

This Payments Bank offer 4% interest on savings account in line with the interest rates of all top commercial banks including State Bank of India, Bank of Baroda and ICICI Bank Ltd, which also offers 4% interest rate on savings account deposits.

Cash withdrawal charge

Customers will be given 5 free transactions in non-metro cities & 3 free transactions in metro cities.
After the completion of free limits, customers will be charged Rs 20 for each subsequent cash transactions.

Debit Cards

–>The customers will be offered a Rupay debit card at an annual subscription cost of Rs 100 plus delivery charges.
–>This bank will also provide a cheque book at a cost of Rs 100. Online fund transfer Paytm Payments Bank will provide services such as Immediate Payment Service (IMPS), Unified Payment Interface (UPI) and National Electronic Fund Transfer (NEFT) free of cost to its customers.

Background

–>The Head of the banks RBI had given approval to Paytm Payments Bank Ltd, an entity majority owned by One97 Communications earlier this year.
–>In 2015, RBI had awarded ‘in-principle’ approval to Vijay Shekhar Sharma to set up a Payments Bank along with 10 others with an objective of deepening financial inclusion.
–>This bank main aim is to plans to continue the operations in 31 branches and 3,000 customer service points in the first year.