One97 Communications, the parent company of digital payments company Paytm, issued a public notice that it would be transferring its wallet business, after necessary approvals, to the newly-incorporated Payment Bank entity.
Paytm’s parent company, headed by Vijay Shekhar Sharma, is waiting for the requisite RBI approvals to start operations of the Paytm Payments Bank. While ownership of the Paytm Wallet business is transferred to Paytm Payments Bank, One97 Communications will remain the owner of the e-commerce platform of the company.
“As per the directions of RBI, the company will transfer its wallet business to the newly-incorporated Paytm Payments Bank Limited (PPBL) after receipt of necessary approvals,”
a spokeswoman for Paytm told ET.
The central bank has granted an ‘in-principle payments bank licence’ to Sharma, who holds a 51% share in the payments bank, with the balance owned by One97Communications.
In the public notice, Paytm also gave the option to customers to list themselves out if they wish to, by mailing at firstname.lastname@example.org or logging into paytm.com/care and redeeming balances by a one-time bank transfer by specifying the bank details. If failing to give bank details, the customer wouldn’t be able to transact with the wallet until they submit their bank details.
The above changes and transfers aren’t applicable for individuals whose wallets have been inactive for the last six months and show a zero balance.
“Banks have their own mobile wallets, so it should not be a problem for Paytm to have its wallet business merged with the payments bank business. However, in line with regulatory requirements the company has had to segregate its ecommerce business from the payments business,”
said Bhavik Hathi, managing director of consultancy firm Alvarez & Marsal.
Paytm users whose wallet have not been used in six months, or have zero balance will not have their accounts transferred to the payments bank entity. They will have to log into their account to give permission to make the transfer.
Paytm has seen tremendous growth over the last month after the demonetisation of the old Rs. 500 and Rs. 1000 notes by Prime Minister Narendra Modi. The company’s user base has crossed 155 million and half a million people are joining the platform per day since cash became hard to come by. Paytm has also been adding 20,000 merchants a day to its platform since demonetisation.
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