by Aakriti Shrivastava
One97 Communications Ltd, that runs Paytm, has set up a new entity called Paytm Money Ltd that will offer investment and wealth management products, the company said in a blog. The company is looking to selling these products to customers of its other new entity, Paytm Payments Bank. One97 Communications will reportedly invest close to $10 million upfront in Paytm Money Ltd.
One97 has applied to the Securities and Exchange Board of India (Sebi) to launch a Paytm Money as a new wholly-owned subsidiary, the fourth product by the company after Paytm Wallet, Paytm Mall, and the most recent Paytm Payments Bank.
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The new company will be headed by Pravin Jadhav as senior vice-president. Jadhav who previously worked with Rediff and social networking site Wishberg said that Paytm Money will be an entirely technology-led digital product without any offline presence.
To start with, it may offer mutual fund products to users and is in discussions with asset management companies to offer these products. Paytm Money plans to capitalize on relatively low investment in the product and double its market share in two years, according to Jadhav.
Update: Note that Paytm’s blog does not mention Jadhav’s tenure as head of growth at FreeCharge. Last year, FreeCharge added investment services with Reliance Mutual Fund. Users could invest in ultrashort-term debt funds (fixed-income instruments which are mostly liquid with short-term maturities) through FreeCharge’s platform. Medianama has reached out to Paytm to confirm the types of product they will offer. The story will be updated when we receive a response.
Paytm Payments Bank
In November 2017, One97 launched Paytm Payments Bank, with a capital allocation of nearly Rs 400 crore. The bank offers a 4-7% interest rate on savings account for deposits, and up to 7% on a linked sweep out fixed deposit, without a fee for creation and breakage.
The company is issuing RuPay debit cards for every account holder today and will be launching cash withdrawal points with business correspondents across the country. It also offers small and microloans to customers from partner banks, mainstream banks, private sector banks.
Paytm claims to have 28 crore registered users, 18 crore wallets, Rs 250 crore annual transactions, 50 lakh merchants and Rs 80,000 crore annual transaction value.