India's leading digital wallet provider Paytm has received a final licence from the Reserve Bank of India for its payments bank, clearing the way for its launch next week.
The Noida-based company also announced that its long-time executive and vice-president Renu Satti will be the chief executive of the payments bank. Last year, Paytm had named Shinjini Kumar, a former central banker and senior executive at consultancy PwC, as CEO-designate of its payments bank.
“We are in process of launching Paytm Payments Bank on May 23.We recently received approval from RBI for Renu Satti to be the CEO,“ said a spokeswoman for Paytm.
The payments bank licence has been awarded to Paytm founder Vijay Shekhar Sharma, who will hold the majority share in Paytm Payments Bank, with the rest being held by parent company One97 Communications.
Chinese ecommerce giant Alibaba, which owns a majority stake in the Paytm wallet operator, will not have a direct shareholding in the payments bank.
One97 is in talks to raise $1.4-1.9 billion from Japanese telecom and internet company SoftBank at a valuation of $8-9 billion.
One97 restructured its business ahead of the launch of the payments bank in December, merging the wallet business with its payments bank operations. As the new entity begins operations, Paytm's digital wallets will be moved to Paytm Payments Bank. Customers will have the option of discontinuing their wallet services.
Satti has been with One97 Communications for over a decade, most recently as the head of its movie-ticketing business. As for Kumar, a person familiar with the developments said, she was leaving the company to join a financial organisation at a senior-executive level similar to that of her role at Paytm.
Kumar confirmed her exit to ET. “I haven't officially resigned but have communicated my decision to move on. I will stay on until I am needed to enable a smooth transition for the (new) CEO-designate,“ she said.
RBI allows payments banks to accept deposits from individuals and small businesses of up to `1 lakh each.
With the objective of bringing more people under India's banking system, RBI kicked off an era of differentiated banking by allowing small finance banks and payments banks to start services.
Re-disseminated by The Asian Banker from The Economic Times