NEW DELHI: Digital payments provider Paytm has received final approval of the Reserve Bank to formally launch its payments bank. It expects to start operations next month. One 97 Communications, the parent company of Paytm, is preparing to merge its wallet service with the payments bank.
If you are a Paytm user and worried about the change, here’s what you need to know:
What will happen to the money in Paytm wallets?
The money will be transferred to the Paytm Payments Bank Limited as the wallet business will become part of the new company. It will happen automatically, and you need not do anything. Other banks too have their wallet businesses apart from their usual business.
Will the Paytm app change?
No. The user experience will remain the same as the app will continue to work as it does. You will continue to use it to pay for taxi, fuel, food, etc. the same way.
What will change then?
The wallet business will get transferred to the new company but will keep running as it is.
Will I get a bank account number, cheque book, debit card, etc. ?
Only if you opt to open an account with the new payments bank of the company. Otherwise your wallet will keep working as it is. The company will give you an option to open a separate account. You will earn interest on your money if you choose to open a payments bank account.
How is a payments bank different from the usual bank?
A payments bank cannot lend or give advance to customers. It can issue cheque books and debit cards but not credit cards. There is a limit on the money you can keep in your account. You cannot keep more than Rs 1 lakh in the Paytm payments bank. The purpose behind these banks is to provide quick and basic banking services to the people at the bottom. Airtel too is launching a payments bank.