Paytm Payments Bank

Last updated
Paytm Payments Bank
Company type Private company
Industry Financial services
Founded28 November 2017;6 years ago (28 November 2017) [1]
Founder Vijay Shekhar Sharma
Headquarters Noida, India
Area served
India
Key people
Surinder Chawla (CEO), Deependra Singh Rathore (CPTO, Interim CEO) [2]
Products Banking
Owners
Website www.paytmbank.com

Paytm Payments Bank (PPBL) is an Indian payments bank, founded in 2017 and headquartered in Noida. [4] In the same year, it received the license to run a payments bank from the Reserve Bank of India and was launched in November 2017. [5] [6] [7] In 2021, the bank received a scheduled bank status from the RBI. [8] [9]

Contents

Vijay Shekhar Sharma holds 51 percent in the entity with One97 Communications holding 49 percent. Vijay Shekhar Sharma is the promoter of Paytm Payments Bank, and One97 Communications Limited is not categorized as one of its promoters. [10] [11] He resigned as part-time non-executive chairman and board member of Paytm Payments Bank, citing regulatory challenges with the Reserve Bank of India. [12] [13]

On 31 January 2024, Paytm Payments Bank was stopped from onboarding new customers onto their platform, due to persistent non-compliance and continued material supervisory concerns within the bank. It was also told to not accept deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards after 15 March 2024. [14] [15] The Reserve Bank of India has taken this step under Section 35A of the Banking Regulation Act, 1949. According to the RBI, this decision aims to address certain irregularities in Paytm Payments Bank's banking services, ensuring compliance with regulatory norms. [16]

History

In 2015, Paytm Payments Bank Limited received in-principle approval from the Reserve Bank of India to set up a payments bank and was formally inaugurated on November 28, 2017. [7] [17]

In the financial year 2020, the bank facilitated more than 485 crore transactions worth ₹4.6 lakh crore. [18] It processed over 778 million UPI transactions amounting to ₹89,388 crore in June 2022 [19] and continues to be India’s biggest UPI beneficiary bank [20] with over 1,370 million digital transactions in June 2022. [19] [21]

In March 2021, the bank received approval from the Securities and Exchange Board of India for issuing payment mandates for initial public offerings (IPOs) through its "@paytm" UPI handle. [22] [23]

After the RBI banned it from accepting deposits from 15 March 2024, it had to quickly migrate the handle to another company with a valid banking license. The handle was transferred to Yes Bank one day before the deadline to ensure existing users and merchants did not face any issues with their UPI transactions and AutoPay mandates. [24]

Products and services

Paytm Payments Bank offers savings and current accounts with a debit card, facilitating fast and easy payments. [25] Paytm Payments Bank has issued seven million Visa debit cards through its platform in FY'21. [26]

Partnership

In January 2018, Paytm Payments Bank partnered with IndusInd Bank to offer fixed deposits. [27] It entered into a partnership with MasterCard for the issuance of virtual and physical debit cards in April 2020. [28] In January 2021, it tied up with Suryoday Small Finance Bank to offer fixed deposit services to its account holders. [29] Since June 2021, it is not providing new fixed deposit creation with Suryodaya Bank. [30]

Financials

Paytm Payments Bank reported a ₹19 crore profit for the financial year 2018-2019, making it the first payments bank in India to become profitable. [31] The company registered a profit of ₹29.8 crore for the financial year 2020. [32]

Regulatory issues

In June 2018, the Reserve Bank of India barred Paytm Payment Bank from opening new customer accounts, following an audit by the Reserve Bank of India, which made some observations about the process the company follows in acquiring new customers and its adherence to KYC norms. [33] [34] However, in January 2019, it received approval from the RBI to resume on-boarding new customers. [35] In October 2021, RBI imposed a fine of ₹1 crore [36] on the bank for violating laws pertaining to payments and settlement. On 11 March 2022, RBI prohibited PPBL from onboarding new customers owing to "certain material supervisory concerns observed in the bank". [37] [38]

In continuation of these actions, and after the validation report of the external auditors revealed persistent non-compliance and continued material supervisory concerns in the bank, RBI ordered the bank to stop onboarding customers and not to accept deposits engaging in credit transactions, or making top-ups in customers accounts after 29 February 2024. [14] The prohibition order also includes not accepting additional deposits in prepaid instruments, wallets, FASTags, or National Common Mobility Cards. [39]

The deadline was extended to 15 March 2024 by a press release a week later. [40]

Awards and recognition

See also

Related Research Articles

HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai. It is India's largest private sector bank by assets and the world's sixth-largest bank by market capitalization as of January 2024, following its takeover of parent company HDFC. The Reserve Bank of India (RBI) has identified the HDFC Bank, State Bank of India, and ICICI Bank as Domestic Systemically Important Banks (D-SIBs), which are often referred to as banks that are “too big to fail”.

<span class="mw-page-title-main">National Financial Switch</span> Bank network in India

National Financial Switch (NFS) is the largest network of shared automated teller machines (ATMs) in India. It was designed, developed and deployed by the Institute for Development and Research in Banking Technology (IDRBT) in 2004, with the goal of inter-connecting the ATMs in the country and facilitating convenience banking. It is run by the National Payments Corporation of India (NPCI). As on 31st January’ 22, there were 1,203 members that includes 111 Direct, 1,045 Sub members, 43 RRBs and 4 WLAOs using NFS network connected to more than 2.55 Lac ATM (including cash deposit machines/recyclers).

Payment and Settlement Systems are used for financial transactions in India. Covered by the Payment and Settlement Systems Act of 2007, legislated in December 2007, they are regulated by the Reserve Bank of India (RBI) and the Board for Regulation and Supervision of Payment and Settlement Systems.

<span class="mw-page-title-main">Yes Bank</span> Indian bank

Yes Bank is an Indian bank headquartered in Mumbai, India and was founded by Rana Kapoor and Ashok Kapoor in 2004.

The National Payments Corporation of India is an organization that operates retail payments and settlement systems in India. The organization is an initiative of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India.

RuPay is an Indian multinational financial services and payment service system, conceived and launched by the National Payments Corporation of India (NPCI) in 2014. It was created to fulfil the Reserve Bank of India's (RBI) vision of establishing a domestic, open and multilateral system of payments. RuPay facilitates electronic payment at all Indian banks and financial institutions. NPCI maintains ties with Discover Financial and JCB to enable the RuPay Card scheme to gain international acceptance.

Mobile payments is a mode of payment using mobile phones. Instead of using methods like cash, cheque, and credit card, a customer can use a mobile phone to transfer money or to pay for goods and services. A customer can transfer money or pay for goods and services by sending an SMS, using a Java application over GPRS, a WAP service, over IVR or other mobile communication technologies. In India, this service is bank-led. Customers wishing to avail themselves of this service will have to register with banks which provide this service. Currently, this service is being offered by several major banks and is expected to grow further. Mobile Payment Forum of India (MPFI) is the umbrella organisation which is responsible for deploying mobile payments in India.

MobiKwik is an Indian payment service provider founded in 2009 that provides a mobile phone-based payment system and digital wallet. Customers can add money to an online wallet that can be used for payments. In 2013 the Reserve Bank of India authorized the company's use of the MobiKwik wallet, and in May 2016 the company began providing small loans to consumers as part of its service.

FASTag is an electronic toll collection system in India, operated by the National Highways Authority of India (NHAI). It employs Radio Frequency Identification (RFID) technology for making toll payments directly from the prepaid or savings account linked to it or directly toll owner. It is affixed on the windscreen of the vehicle and enables one to drive through toll plazas without stopping for transactions. The tag can be purchased from official Tag issuers or participating Banks which are Made in India and if it is linked to a prepaid account, then recharging or top-up can be as per requirement. The minimum recharge amount is ₹100 and can be done online. As per NHAI, FASTag has unlimited validity. 7.5% cashback offers were also provided to promote the use of FASTag. Dedicated Lanes at some Toll plazas have been built for FASTag.

<span class="mw-page-title-main">Bharat Bill Payment System</span> Integrated bill payment system in India

Bharat Bill Payment System (BBPS) is an integrated bill payment system in India offering interoperable and accessible bill payment service to customers through a network of agents of registered members as Agent Institutions (AI), enabling multiple payment modes, and providing instant confirmation of payment.

<span class="mw-page-title-main">Payments bank</span> New model of banks initiative by Reserve Bank of India

Payments banks are a new model of banks, conceptualised by the Reserve Bank of India (RBI), which cannot issue credit. These banks can accept a restricted deposit, which is currently limited to ₹200,000 per customer and may be increased further. These banks cannot issue loans and credit cards. Both current account and savings accounts can be operated by such banks. Payments banks can issue ATM cards or debit cards and provide online or mobile banking. Bharti Airtel set up India's first payments bank, Airtel Payments Bank.

<span class="mw-page-title-main">Paytm</span> Indian financial technology company

Paytm is an Indian multinational financial technology company, that specializes in digital payments and financial services, based in Noida, India. Paytm was founded in 2010 by Vijay Shekhar Sharma under One97 Communications. The company offers mobile payment services to consumers and enables merchants to receive payments through QR code payment, Payment Soundbox, Android-based-payment terminal, and online payment gateway. In partnership with financial institutions, Paytm also offers financial services such as microcredit and buy now, pay later to its consumers and merchants.

<span class="mw-page-title-main">Unified Payments Interface</span> Indian instant payment system

Unified Payments Interface, commonly referred to as UPI, is an Indian instant payment system as well as protocol developed by the National Payments Corporation of India (NPCI) in 2016. The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions. It is used on mobile devices to instantly transfer funds between two bank accounts. The mobile number of the device is required to be registered with the bank. The UPI ID of the recipient can be used to transfer money. It runs as an open source application programming interface (API) on top of the Immediate Payment Service (IMPS), and is regulated by the Reserve Bank of India (RBI). Indian Banks started making their UPI-enabled apps available on Google Play on 25 August 2016.

Oxigen Services is an Indian fintech company. It is involved in the micropayment of services and remittances in real time.

BHIM is an Indian mobile payment app developed by the National Payments Corporation of India (NPCI), based on the Unified Payments Interface (UPI). Launched on 30 December 2016, it is intended to facilitate e-payments directly through banks and encourage cashless transactions. It was named after Bhimrao Ambedkar.

<span class="mw-page-title-main">Airtel Payments Bank</span> Indian Payments Bank

Airtel Payments Bank is an Indian payments bank with its headquarters in New Delhi. The company is a subsidiary of Bharti Airtel. On 5 January 2022, it was granted the scheduled bank status by the Reserve Bank of India under the second schedule of RBI Act, 1934.

PhonePe is an Indian digital payments and financial services company headquartered in Bengaluru, Karnataka, India. PhonePe was founded in December 2015, by Sameer Nigam, Rahul Chari and Burzin Engineer. The PhonePe app, based on the Unified Payments Interface (UPI), went live in August 2016.

National Automated Clearing House regional ECS into one National Payment System, is claimed to be better than its predecessor, Electronic Clearing Service.

<span class="mw-page-title-main">One97 Communications</span> Indian multinational technology company

One97 Communications Ltd is an Indian multinational technology company, headquartered in Noida. It was founded in 2000 by Vijay Shekhar Sharma. Through its subsidiaries and businesses, the company offers digital payment and financial services to consumers and merchants in India. It also provides mobile advertising, marketing and payments for merchants.

<span class="mw-page-title-main">Digital rupee</span> Official currency of India

The Digital Rupee (e₹) or eINR or E-Rupee is a tokenised digital version of the Indian Rupee, issued by the Reserve Bank of India (RBI) as a central bank digital currency (CBDC). The Digital Rupee was proposed in January 2017 and launched on 1 December 2022. Digital Rupee is using blockchain distributed-ledger technology.

References

  1. ↑ "Arun Jaitley launches Paytm Payments Bank, vouches for digital payments". Business Today. November 28, 2017.
  2. ↑ "Paytm Payments Bank appoints Rathore as interim CEO". PYMNTS.com. October 16, 2022.
  3. ↑ "Why RBI lost patience with Paytm Payments Bank: Anti-money laundering lapses, related party transactions". Moneycontrol. 2 February 2024. Retrieved 2 February 2024.
  4. ↑ "Paytm Payments Bank Launched: All About India's Mobile-First Bank With Zero Minimum Balance". India.com. November 29, 2017.
  5. ↑ "Paytm Payments Bank launched. Here's how it compares to rivals Airtel, India Post". livemint.
  6. ↑ "Paytm gets a green signal from the RBI to formally launch its 'Payments Bank'". The Economic Times. January 4, 2017.
  7. 1 2 "RBI gives licence for 11 payments banks". The Hindu Business Line. January 23, 2018.
  8. ↑ "Paytm Payments Bank receives scheduled bank status from RBI". Business Standard.
  9. ↑ Srivats, KR (January 9, 2018). "Arun Jaitley launches Paytm Payments Bank". The Hindu Business Line.
  10. ↑ Shetty, Mayur (August 29, 2020). "Paytm seeks in-principle nod on small bank licence". The Times of India .
  11. ↑ "One 97 Communication" (PDF). BSEIndia.
  12. ↑ "Paytm's Vijay Shekhar Sharma steps down from payments bank board". The Times of India. 26 February 2024.
  13. ↑ "Announcement under Regulation 30 (LODR)-Press Release / Media Release" (PDF). BSE Limited.
  14. 1 2 "Reserve Bank of India - Press Releases". www.rbi.org.in. Archived from the original on 2024-01-31. Retrieved 2024-01-31.
  15. ↑ Livemint (2024-01-31). "RBI bars Paytm from accepting deposits in any customer account after 29 February". mint. Archived from the original on 2024-01-31. Retrieved 2024-01-31.
  16. ↑ "Paytm Bank Faces Trouble as RBI imposes restrictions". 2024-02-01. Retrieved 2024-02-01.
  17. ↑ "Paytm Payments Bank Formally Inaugrated[sic], To Invest $500 Mn In KYC". inc42.
  18. ↑ "Paytm Payments Bank emerges as a success story of the banking model, registers profit for the 2nd consecutive year". Business Blog.
  19. 1 2 "UPI Ecosystem Statistics". npci.
  20. ↑ "Paytm Payments Bank leads UPI beneficiary chart; SBI biggest remitter in December". Economic Times.
  21. ↑ "Paytm Payments Bank processes 970 million digital transactions in March". Livemint. April 13, 2021.
  22. ↑ "sebi approves paytm upi handle we now enable seamless applications for ipo". paytmbank.
  23. ↑ "Paytm Payments Bank can now issue payment mandates for IPOs as SEBI approves UPI handle". Financial Express. March 15, 2021.
  24. ↑ "NPCI grants approval to One97 Communications Limited (OCL) to participate in UPI as a Third-Party Application Provider (TPAP) under multi-bank model" (PDF). National Payments Corporation of India (NPCI). 2024-03-14. Archived (PDF) from the original on 2024-03-16. Retrieved 2024-03-16.
  25. ↑ Motiani, Preeti (April 7, 2021). "Payments bank deposit limit hiked to Rs 2 lakh by RBI". The Economic Times.
  26. ↑ "Paytm Payments Bank overachieved its target of issuing Visa debit cards at 7 million in FY21 as against goal of 1 million". Business Insider. March 1, 2022.
  27. ↑ Anupam, Suprita (January 8, 2018). "Paytm Payments Bank Partners With IndusInd Bank To Offer Fixed Deposit". Inc42.
  28. ↑ "Paytm Payments Bank partners with Mastercard". The Times of India . April 17, 2020.
  29. ↑ "Paytm Bank account holders can now avail FD services from Suryoday Bank". Livemint. January 19, 2021.
  30. ↑ @paytmbankcare (June 15, 2021). "@KanhapskStonie Hi, We would like to inform you that we are not providing new FD creation with Suryodaya Bank. Rest…" (Tweet) – via Twitter.
  31. ↑ Merwin, Radhika (September 10, 2019). "Why five out of the 11 payments banks have shut shop". The Hindu Business Line.
  32. ↑ "Paytm Payments Bank posts net profit of ₹30 crore in FY20". The Hindu Business Line. June 9, 2020.
  33. ↑ Raj, Amrit; Verma, Shrutika (August 1, 2018). "Paytm payments bank stops enrolling new users after RBI concerns". Hindustan Times.
  34. ↑ "Paytm Payments Bank is still not allowed to add new customers, says CEO". Business Standard. August 25, 2019.
  35. ↑ Bhakta, Pratik; Chanchani, Madhav (January 1, 2019). "RBI allows Paytm Bank to restart account opening t". The Economic Times.
  36. ↑ "Reserve Bank of India - Press Releases". www.rbi.org.in. Retrieved 2022-03-14.
  37. ↑ "RBI directs Paytm Payments Bank to stop onboarding new customers, orders IT audit". Moneycontrol. 11 March 2022. Retrieved 2022-03-14.
  38. ↑ "Reserve Bank of India - Press Releases". rbi.org.in. Archived from the original on 2023-09-24. Retrieved 2024-01-31.
  39. ↑ Mishra, Lalatendu (2024-01-31). "RBI curbs to render Paytm wallet and FASTag inoperative". The Hindu. ISSN   0971-751X . Retrieved 2024-02-01.
  40. ↑ "Reserve Bank of India - Press Releases". rbi.org.in. 2024-02-16. Archived from the original on 2024-02-16. Retrieved 2024-02-16.
  41. ↑ "ASSOCHAM Annual FinTech Digital Payments 2021". ASSOCHAM. September 8, 2021.
  42. ↑ "ETBFSI Awards". Twitter.com . The Economic Times. December 4, 2020.
  43. ↑ "Infosys Finacle Client Innovation Awards 2020 – Winner Announcements". EdgeVerve Systems. 2020.
  44. ↑ "MeitY Start-up Summit, 2019". Paytm via Twitter. October 29, 2019.
  45. ↑ "Winners of Infosys Finacle Client Innovation Awards 2019 Announced". Infosys. April 10, 2019.
  46. ↑ "Paytm Payments Bank: Building a Truly Digital Bank". Celent.com. April 11, 2019.
  47. ↑ "2019 winners – Retail Banker International Asia Trailblazer Awards". rbiasiatrailblazer.co.uk. 2019.
  48. ↑ "Excellence Award 2018". npci.org.in. National Payments Corporation of India. 2018.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.