[New Delhi] Paytm to Merge Its Wallet Business with Payments Bank,Chinese Alibaba May not Hold Direct Shares
One97 Communications, the firm that owns Paytm, is restructuring its business ahead of the launch of its Payments Bank, merging the wallet business with payments bank operation.
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As per Paytm spokesperson.”It is transfer of business. Wallet business will move to payments bank while One97 will be managing the sales part for the wallet business. The transfer will be complete once payment bank licence is obtained,”
The company had incorporated Paytm E-commerce and Paytm Payments Bank as separate companies earlier this year.
Reserve Bank of India had awarded `in-principle’ approval to Vijay Shekhar Sharma, the founder of One97 Communications, to set up a Payments Bank.
Paytm Payments Bank is in the process of obtaining the final licence from the RBI and would commence its operations after obtaining due approvals, the spokesperson added.
Sharma will hold the majority share in the new Payments Bank entity, with the rest being held by One97 Communications.
Alibaba Group and its affiliate Ant Financial pumped in USD 680 million into Paytm’s parent One97 Communications last year, taking its total shareholding to over 40 per cent in the country’s largest mobile wallet operator Paytm with close to 160 million customers. However, the Chinese entity will not have a direct shareholding in the payments bank.
Paytm has not given a fresh timeline for the launch of its payment bank services, which was earlier slated to begin operations around Diwali.
Later, three entities — Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services — backed out of the payments bank licensing.
Last month, Airtel became the first payments bank to go live in the country when it rolled out a pilot of its banking services in Rajasthan.