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Highlights

Paytm launched the bank in May this year
It's now open for all with offline KYC registration
The company is now working on building an ATM network too

Paytm Payments Bank was formally launched by CEO Vijay Shekhar Sharma on Tuesday, even as the service was available to consumers with the latest update to the Paytm app. The offline services of the Paytm Payments Bank have also started with this formal announcement, complementing the online service. The event was attended by Finance Minister Arun Jaitley, and saw the company's chief executive and founder outline how the bank will grow, and shared some details about the progress made so far. To recall, the Paytm bank officially opened its services in May this year.From a customer's perspective, the Paytm wallet and the Paytm Payments Bank are two separate entities, though both are owned by the same corporate entity. Wallets will continue to operate, but if you already have the mobile app to manage your wallet, you can use the same to manage your bank account as well, if you choose to open one. The wallet operates separately from the bank account, they are not linked, so you can continue to use the wallet without any change, even if you create a bank account.The Paytm Bank officially opened its services in May this year. There are some differences between payments banks and mobile wallets - these accounts are similar in that they're designed to be easily managed digitally, with a Rs. 1 lakh limit on the deposit. However, payments banks can offer debit cards, and pay interest on the money deposited in the account.Creating a Paytm Payments Bank account works pretty seamlessly from the mobile app, as all you have to do is sign in, request an account, and then enter your address for the KYC formalities. If you've already done the KYC for a Paytm wallet, even this step isn't required.

At the event, Finance Minister Jaitley talked about the importance of a digital platform which has made access to banking systems simpler for everyone, describing it as a "new chapter in history being written, with every day, some such initiative is taking place, which helps make the economy more formal."Paytm Payments Bank is paying an interest rate of 4 percent, but the cashbacks being offered earlier are now gone. Sharma addressed this at the launch, saying that the amount was actually 4 percent to 7 percent. "Your savings account gets 4 percent, like any other bank, but we have a swipe-in FD where there is zero fee for creation or breakage," he explained, "and customers can look at it as a long term saving product, and that is paying at 7 percent."He also reiterated something that had been announced earlier - that there are no minimum balance requirements or charges for online transactions. Earlier, Paytm had announced that it would not be deploying ATMs, but on Monday, he did mention that the company is working on setting these up as well. However, it will start with what he's calling "Paytm ka ATM", where the company will work with a business correspondent network to operate deposits and withdrawals."Paytm ka ATM - is a human you can go to, take the money, deposit, with your thumb or card, and on day one of the launch, we will have 100,000 distribution points of Paytm ka ATM," says Sharma. "That is a BC [business correspondent] led banking model." These will be merchants that you can go to and the money can be immediately debited from your account when you take cash, or added when you deposit any cash. The business correspondents will also be able to verify the users with Aadhaar, and payments can be routed by AEPS (Aadhaar Enabled Payments System), Sharma added.There will be no charges to deposit money into your Paytm account and up to 3 withdrawals in metros (and up to 5 in non-metros) via ATMs or branches will be free of charge. Paytm Bank is aiming to open 31 physical branches across the country in the near future.Aadhaar has been a big driver for Paytm's business, he added, explaining that it has cut down the customer acquisition cost significantly thanks to e-KYC. "Today we have 1.2 lakh biometric devices, where you can do a KYC. We are doing more than 50,000 KYC a day," says Sharma, adding, "Aadhaar has been a boon to us." He also added that every merchant who accepts Paytm payments will accept BHIM UPI transactions, adding that Paytm has plans to become the largest merchant acquirer for UPI by the end of the year.

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