Paytm Payments Bank is now operational and will expand to 31 branches and 3,000 customer service points in the first year itself.
The bank will also offer a cash back of Rs 250 to customers depositing Rs 25,000 in the payment bank.
Paytm Payments Bank will get Rs 400 crore in investment in the first two years of operation. One97 Communications founder Vijay Shekhar Sharma personally owns a 51% stake in the payment bank, as per regulatory requirements, with the remaining stake owned by One97 Communications.
Sharma and One97 have together already invested about Rs 220 crore in the payments bank.
One97 Communications, the parent company of digital payments player Paytm, will transfer the wallet business to Paytm Payments Bank soon.
Paytm Payments Bank will be headed by Renu Satti as CEO. The Payments Bank will have a zero balance requirement and will offer online transactions such as IMPS, NEFT, and RTGS free of charge.
The bank will offer an interest of 4% per annum for savings accounts. The first one million customers to open a payments bank account and reach a deposit of Rs 25,000 will get a cashback of Rs 250 instantly.
Payments banks can accept deposits of up to Rs 1 lakh per account. The bank will also roll out its banking app in the beta phase, initially for its employees. The payments bank will also offer RuPay debit cards to consumers, which can be used for five free ATM cash withdrawals in non-metro cities per month after which they will be charged Rs 20 per withdrawal.
The whole model of business in terms of Paytm Payments Bank has been approved by the Reserve Bank of India (RBI).