Paytm Payments Bank Ltd on 23 May rolled out its banking operations. With the launch of Paytm Payments Bank, there are now three payments banks in the country, including Airtel Payments Bank Ltd and India Post Payments Bank Ltd. A payments bank is a differentiated bank that allows customers to open savings accounts for deposit amounts of up to Rs1 lakh. As of now, Paytm Payments Bank is offering the service by invitation only. Here is a look at the products and services that all payments banks offer.
On savings accounts, the newly launched Paytm Payments Bank is offering 4% per annum interest. Its competitor Airtel Payments Bank gives 7.25% per annum on savings accounts , while India Post Payments Bank provides 5.5% interest per annum.
Paytm Payments Bank’s interest rate is in line with large commercial banks, such as State Bank of India and ICICI Bank Ltd, which offer 4% on savings account deposits. Some of the smaller banks, such as Yes Bank Ltd and RBL Bank Ltd, offer 5.5-7.1% interest on savings accounts, depending on the deposit amount.
India Post Payments Bank offers three kinds of accounts: one regular and two basic savings bank deposit accounts.
For most payments banks, there is a cash withdrawal charge. Paytm Payments Bank’s cash withdrawal charges using ATMs are similar to those of any other major bank of the country. It follows standard Reserve Bank of India (RBI) rules in this regard and as a result you get five free transactions in non-metro cities and three free transactions in a metro city, after which you will be charged Rs20 for each cash withdrawal and Rs5 for non-financial transactions like taking out a mini statement.
In case you need a physical statement from the bank, you will have to pay Rs50 plus delivery charges; additional service tax will also be applicable.
Airtel Payments Bank charges 0.65% of the withdrawal amount if you withdraw cash from a banking point.
India Post Payments Bank doesn’t charge any fee if you withdraw money from an India Post Payments Bank ATM or a Punjab National Bank ATM. However, for withdrawals from other banks’ ATMs, you will be charged as per standard Reserve Bank of India (RBI) rules. For doorstep banking, where the bank delivers cash at customers’ doorsteps, cash deposit and withdrawal charges range between Rs15 and Rs35, depending on the amount.
Paytm Payments Bank will provide RuPay debit cards at an annual subscription of Rs100 plus delivery charges plus tax. In case of loss of card, you will have to pay Rs100 plus delivery charges to get it replaced. The bank is also providing a cheque book, with 10 leaves, at Rs100 plus delivery charges.
India Post Payments Bank offers a free debit card, but you will be charged Rs100 if you take add-on cards or a new card in case it is stolen lost. Also, it charges an annual maintenance fee of Rs100, which is applicable from second year onwards.
There are also limitations in terms of withdrawal from ATMs—a maximum amount of Rs10,000 per transaction and a maximum of Rs25,000 per day—depending on the account you hold with the bank. In case the ATM kit or ATM card is returned due to wrong address, you will have to pay Rs100 as charges for the replacement card to be delivered.
Paytm Payments Bank will provide online fund transfer services such as Immediate Payment Service (IMPS), Unified Payments Interface (UPI) and National Electronic Fund Transfer (NEFT) without any charge.
India Post Payments Bank will charge a fee if the transaction happens at a branch or as part of doorstep banking—NEFT will cost Rs2.5-5, while IMPS transactions will cost Rs5. If you do it using mobile banking, NEFT is free but you have to pay Rs4 per transaction for IMPS.
Airtel Payments Bank charges 0.5% of the transferred amount if you transfer funds from Airtel Payments Bank to another bank account through internet banking, mobile app or Unstructured Supplementary Service Data (USSD). Within the bank, fund transfer is free of cost.
Paytm didn’t respond to the email sent by Mint and all information has been taken from public disclosures made by Paytm Payments Bank.
What happens to the money in your e-wallet?
If you are a Paytm e-wallet customer, what will happen to the money in the e-wallet? Here is what you should know:
Your Paytm wallet will move to Paytm Payments Bank Ltd, that is, from One97 Communication Ltd to Paytm Payments Bank Ltd. This is just a transfer of ownership. There is no impact on your cash flow or the mode of accepting payments. Hence, if you have a balance of Rs1,000 in your current Paytm wallet, the same will reflect in your new Paytm Payments Bank wallet. This also means you will not earn interest on the money in the e-wallet.
You have to option to open a savings or a current account. If you convert the e-wallet into a savings account, you can earn interest of 4% on the deposits. It is not mandatory to open an account with Paytm Payments Bank to use the wallet. If you want to open an account with Paytm Payments Bank, you will have to mandatorily comply with the KYC norms, which involve documents such as Aadhaar and Permanent Account Number. For this process, you need to visit a banking point or book an appointment online.