India’s first mobile bank with zero-fee online transactions and no minimum balance is on your Paytm app

In India, as of 2011, only 35% Indians had bank accounts. As of this month, Indian government’s effort under Pradhan Mantri Jan Dhan Yojna led to 306 million JDY accounts opening since its launch in 2014.

The mission to provide no-frills, no-minimum-balance bank accounts to every adult including the ones below the poverty line has been remarkably successful, to say the least.

The premise of PMJDY was to lower bank transactions costs so that millions of Indians who lacked access to financial services could finally be financially included.

The launch of another new service coupled with the increase in mobile data usage could prove to be a highway to not only get more Indians financially secure but also encourage savings and digital adoption.

The watershed moment?

Paytm Payments bank has finally launched as India’s mobile-first bank with zero charges on all online transactions and no minimum balance requirement. Paytm Payments bank will be a part of the popular Paytm wallet app.


Vijay Shekhar Sharma, CEO, Paytm said during the launch that the entire wallet business is currently contribution positive and by financial year 2018 he expects the Payments Bank business to facilitate one lakh transactions. Sharma still owns majority stake in the new bank, and the remaining share is owned by One97 Communications Ltd.

Business Insider spoke to Renu Satti, CEO, Paytm Payments Bank who reaffirmed the company’s commitment to serving the large un-served and under-served population “We are committed to offering the most transparent, safe and trusted banking to masses and aim at onboarding 500 million people on the platform in the next three years."

How does it compare

Paytm Payments Bank has planned an investment of $500 million in KYC (Know Your Customer) operations and is setting up KYC centers across India to complete KYC for customers and make them eligible for a Payments Bank account. The bank will have 31 branches all over India by the end of this year. The bank also plans on opening ATM branches and 'people' branches for cash disbursements.

The Payments bank is offering benefits like zero-balance account, free IMPS, NEFT, RTGS, and UPI transactions.

Paytm Payments Bank account holders will also be eligible to earn an interest of 4 per cent on savings every month and offered a free insurance cover of up to Rs 2 lakh in case of death or permanent disability according to the company’s terms and conditions.The account holders of Paytm Payments Bank will get a free digital debit card after signing up but they can also ask for a physical Rupay card, which will cost Rs 100 excluding delivery charges.

It also has some limitations like it can't offer financial products of their own as a business entity, but it can act as a business correspondent and partner with other financial institutions and banks to offer loans, fixed deposits, insurances and mutual funds.

Paytm Payments bank is also providing customers with a physical cheque book and Passbook on request but Satti says that they will always be digital-first, “We have created a customer-centric product which will be easy to adopt on mobile. While we don’t want to limit our customers, we will ensure everything is available on the app itself.”

Satti maintains that the bank will be soon start lending to create better access to easy loans and the Paytm Payments Bank aims to be EBITDA profitable in the next two years. “A great product should be easily adoptable and we want to make banking easy for the masses. We will also be launching loyalty programs to onboard the people who are already a part of the formal banking system," she signs off.

Here are the charges the new digital bank will levy:

ATM Transactions

Non-metro Locations: 5 free every month; post that Rs 20/transaction
Balance check: Rs 5/transaction

Metro Locations: 3 free every month; post that: Rs 20/transaction
Mini statement, Balance check: Rs 5/transaction

Annual subscription for physical RuPay Debit Card: Rs 100 annually
Cheque book (10 leaves): Rs 100 and delivery charges

Charges on Paytm Wallet
Paytm Wallet to Bank Transfer - Basic Customer 3 per cent
Paytm Wallet to Bank Transfer - KYC Customer 3 per cent