Paytm Sets Goal To Become Biggest Digital Bank In The World

Indian Prime Minister Narendra Modi shook up the country in November 2016 when he announced a massive demonetization drive to remove black money from the economy and to force over 1.3 billion people to go cashless and become a digital economy overnight.

That decision had immense ramifications for the Indian economy which has declined during the last 12 months and also for the common man who has had to bear numerous hardships.

However, there are a few stakeholders that have profited from PM Modi’s cashless economy drive.

Paytm is one of those companies that has benefitted greatly from this move and is now set a goal to open 500 million digital accounts and turn itself into the biggest digital bank in the world.

Paytm

Paytm is a digital wallet company that provides digital financial services all across India. The company has launched a new subsidiary known as the Paytm Payments Bank and will target Indians who do not have access to digital financial services. The company invited Finance Minister Arun Jaitley to inaugurate the launch of Paytm Payments Bank.

In a statement, Vijay Shekhar Sharma, founder of Paytm said

Digital payments was our entry point, we want to become a vertically-integrated financial services company. We are unveiling our money market fund, launching our debit card and we’ll have the capabilities to allow enterprises to open business accounts. We will launch share trading and insurance products very soon. We want to become an internet-age financial services company

The BJP led government is pushing very hard to get its 1.3 billion citizens to go cashless and embrace a digital economy. There were a number of digital payment companies that applied for licenses to set up payment banks but only a select few received approval. Paytm Payments Bank did get approval and has the authority to remittances and deposits.

However Paytm Payments Bank does not have the right to lend money but Paytm founder has found a way around that lending loophole. The digital bank will introduce charge cards and then provide loans on instalment which can be paid on a monthly basis.

Paytm Payments Bank and other digital entities will target a vast market segment that is mostly uneducated and not digital friendly. This is a cause for concern as there is opportunity for this market segment to be exploited and manipulated by financial savvy businessmen and
employees.

The Finance Minister and his team will hopefully be better prepared than they were for the demonetization drive and GST roll-out and have robust regulations in place to protect Indians from being exploited by the digital economy drive!

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