Mobile payments and e-commerce company Paytm will be pumping in Rs 350 crore into its payments bank division for developing its technology and build physical branches in rural areas, The Economic Times reported.

Chief executive of the company’s payments bank business, Shinjini Kumar, told the publication that it is not looking to open too many branches at the moment and Rs 350 crore will be enough to start with. “We have got separate solutions to address urban and rural consumers as both have different sets of challenges,” The Economic Times quoted Kumar as saying.

Interestingly, Paytm had borrowed close to Rs 300 crore from private sector lender ICICI Bank in working capital loans in March 2016. At the time, Paytm CEO Vijay Shekhar Sharma said that this was for treasury management and that the company was adequately funded.

The Reserve Bank of India had permitted 11 companies including Paytm in 2015 to start payments banks services. These banks don’t provide the full range of services like full-fledged banks. For instance, they are allowed to accept deposits, issue ATM and debit cards, set up branches and banking correspondents but they cannot lend money or issue credit cards.

The launch of Paytm’s payments bank has been pushed back many times but Kumar said that it is likely to be launched by the end of this year during the festive season of Diwali. In June, the company had announced that it has partnered with Infosys to use its Finacle technology for its payments bank.

Paytms’s payments bank plans

The Economic Times Report says that Paytm is looking to tie-up with financial service providers to sell financial products such as mutual funds and insurance. The company is also planning to introduce a debit card-like tool that will allow its customers to withdraw money from ATMs and is already in talks with banks and ATM providers.

In recent times, Paytm has been aggressively partnering with retail chains and restaurants for offline payments. And although these partnerships raise quite a few questions, Kumar said this is critical. “Paytm’s existing O2O (offline-to- online) footprint will be quite important for us as users can pay for their purchases using the payments bank’s money. This is why the company is aggressively adding offline merchants in these areas on our payments platform,” she told the Economic Times.

Related development in payments banks

– In June, the government issued a statement saying that India’s postal department will get an approval from the RBI to start its payment banks operations by March 2017, and it will begin its operations by September 2017.

– In May, Tech Mahindra said it will not be starting its payment banks business. That same month, Sun Pharma, which had partnered with IDFC Bank and telecom operator Telenor to start a Payments Bank, surrendered its license.

– Airtel said it will be launching its payments bank business by the second quarter of the financial year ending March 2017, one month after receiving the license from RBI.