Paytm Payments Bank gets RBI permit to register new customers

After a ban of six months, Reserve Bank of India (RBI) has now allowed Paytm Payments Bank to allow registration of new customers, start KYC (Know Your Customer) formalities for its wallets as well as its bank accounts from December 31.

Paytm Payments Bank is a mobile-first bank with zero charges on all online transactions (such as IMPS, NEFT, RTGS) with no minimum balance requirement and was launched in May 2017. It now offers an interest rate of 4% per annum for savings accounts.

Paytm Payments Bank stopped enrolling new customers on June 20, 2018, following an audit by the RBI, which made certain observations about the process the company follows in acquiring new customers and its adherence to know-your-customer (KYC) norms.

Reports also surfaced that Paytm was modifying its “account opening process to introduce ‘current accounts’, due to which new account creation process had been paused.” Post the audit, Paytm removed Renu Satti as chief executive of the payments bank following RBI’s objections about her ability to lead a banking services firm. The RBI mandates the incumbent of a CEO’s position at a payments bank to be a banker. In October 2018, it then appointed veteran banker Satish Kumar Gupta as managing director and CEO for the Payments bank.

Paytm Payments Bank claims to have over 42 million bank accounts and further aims to achieve 100 million bank accounts by the end of 2019.

In the latest financial report,Paytm Payments Bank also had an edge over other payments banks operating in the country. The company’s revenue took a leap to reach the figure of Rs 729.1 crore in FY18.

Paytm Payments Bank experienced a loss of Rs 20.7 crore during the same period. It had set an aim to invest $500 Mn in KYC operations in order to reach 500 Mn bank accounts by 2020.

Paytm Payments Bank was not the only one to face an interdiction here. Airtel Payments Bank and Fino Payments Bank also faced similar trouble from the RBI-end. The central bank also imposed a fine of $136.9K (INR 1 Cr) on Fino Payments Bank Limited on October 31, 2018, for allegedly opening new accounts despite directions not to do so. The ban on both the banks has now been lifted as well.

Further, Mukesh Ambani-led Reliance Group’s Jio is also starting with live beta trials for its payments bank services dubbed as Jio Payments Bank.