That’s because Paytm only operates a so-called payments bank, which is barred from making loans, issuing credit cards or keeping more than 200,000 rupees in deposits per customer. Even then, Indians clearly see some value in their Paytm Payments Bank accounts. Now, if Paytm had an unrestricted banking license, it could in theory challenge traditional lenders the same way as KakaoBank in Korea. To unlock the value that comes from being an unfettered, deposit-taking bank, Paytm founder Vijay Shekhar Sharma doesn’t need physical branches, a costly endeavor in a large country. He only has to lobby for a change in the license of the payments bank in which the IPO-bound firm has a 49% stake.

Source: Mint July 27, 2021 00:45 UTC