Paytm Payments Bank, which started operations in India a few months ago, has received new capital from its parent company One97 Communications and its founder and CEO Vijay Shekhar Sharma.
The amount received by the company is said to be around ₹122 crore, thus bringing the total amount of money raised by the payment bank so far to around ₹400 crore.
In this latest funding round, Vijay Sharma has invested ₹62 crore, while the rest of the money was put in by One97 Communications and One97 Communications India. This was revealed through the documents filed with the RoC.
At the time of formation of the company, Vijay Sharma and One97 Communications had invested about ₹220 crore, with Sharma owning majority stake in the bank as required by the government norms. In September, both pumped in another tranche of ₹60 crore.
Paytm Payments Bank was incorporated in August last year and started operations in the country on May 23 this year. Between August 2016 and March 2017, the bank saw a turnover of ₹2 crore, while its losses stood at ₹30 crore, reveals the company’s financial documents.
Currently, only four payment banks are operational in India, which includes India Post Payments Bank, Airtel Payments Bank, Fino Payments Bank and Paytm Payments Bank. Notably, RBI has issued license to eleven entities to start payments bank in the country.
Recently, a report suggested that the four payments banks have seen customers put in only ₹236.45 crore into their accounts as on September 30. Out of that, around ₹224 crore is deposited with Airtel Payments Bank alone.
The report revealed that PayTM Payments Bank held outstanding demand deposits worth ₹3.25 crore as on September 30. Despite huge amount of money being pumped into payments banks, customers are still not comfortable enough to deposit their money.
While all the four functional payments banks are paying interest starting from 4% by Paytm to 7.25%, low deposits show that customer are taking time to warm up to the concept of payments bank.
Meanwhile, Vijay Sharma has said that they are aiming to reach 500 million bank accounts by 2020. While the company could achieve that numbers through aggressive marketing campaigns, it will be interesting to see how it encourages users to deposit more money into accounts.