Paytm Payments Bank has announced that it has recorded Rs 1000 crore in deposits with over 5.7 crore or 57 million saving account holders, calling it a milestone for India’s only profitable payments bank.
Amidst the lockdown due to the COVID-19 pandemic, more people are embracing digital banking and this has triggered the numbers for the Noida-based company, a statement said.
The surge in numbers for the bank comes at a time when the digital payments bank ecosystem is struggling to sustain in the current challenging market and economic conditions.
The government-owned India Post Payments Bank pivoted to a small finance bank and Paytm itself was looking for a license from RBI to leverage the lending feature using technology-enabled low-cost operations.
For growth, the Vijay Shekhar Sharma-led Paytm Payments Bank or PPB has ramped up its use cases such as enabling the option to avail benefits of Direct Benefit Transfers or DBT from the government and offering virtual as well as physical debit cards.
With the implementation of the option to avail benefits of DBT, customers will be able to receive the subsidies of various social welfare schemes of the government like cooking gas subsidy, MNREGA payments, old age pension and scholarships directly into their PPB account.
For debit card transactions, PPB claims to have registered over 4.5 million transactions per month in partnership with VISA, Mastercard, and RuPay debit cards. In its recent tie-up with Mastercard, Paytm aims to issue over 10 million digital debit cards by the end of the financial year 2020-2021.
Payments banks aggregate losses increased by 21% to Rs 626.8 crore in the financial year 2018-19 from Rs 516 crore in the previous year. However, PPB was the only entity, which posted a profit in the fiscal. The Alibaba-backed firm made a profit of Rs 19 crore during the period.
Meanwhile, a TOI report said that Paytm’s digital payments transactions through Unified Payments Interface (UPI), e-wallets and debit/credit cards registered a fall of 30-40% due to the COVID-19 outbreak.
The company has also announced that it has been slashing its expenditure by 15-20% for the past two months.