Paytm on Tuesday received the final approval from the Reserve Bank of India to launch a payments bank. It is expected to be rolled out within the next month or two.

“At Paytm Payments Bank, our aim is to build a new business model in the banking industry, focussed on bringing financial services to 100s of millions of unserved or underserved Indians,” said Vijay Shekhar Sharma, founder Patym’s parent company, One97 Communications. “With power of technology and innovation-at-scale, we aim to become a benchmark in world of banking.”

Advertisement

As per the RBI’s direction, Paytm’s e-wallet will now be part of the payments bank. Sharma owns 51% of the bank, while One97 Communications controls 49%. He had told Mint in November that they plans to cover 12 cities in northeast and central India initially, after which they will branch out to western and southern India. He said in a blog post on Tuesday that he intends to take on a “full-time executive role” in the bank. “No other role or responsibility means as much to me.”

With a target of 200 million accounts – both current and savings accounts as well as mobile wallets – in a year, Paytm Payments Bank aims to hit the 500 million mark by 2020. The online payments company already has nearly 150 million users.

Paytm had earlier said that all of its wallets will be transferred to the bank and that customers will have the choice to open a bank account linked to that wallet, Bloomberg Quint reported. It is likely to become the second payments bank to launch after Bharti Airtel, whose venture was rolled out in November.

Payments banks – a new model of banks conceptualised by the RBI – cannot issue loans and credit cards, but many are considering cross-selling banking products through partnerships. They can offer services like ATM and debit cards as well as online and mobile banking.