The Paytm Payments Bank is likely to approach the Reserve Bank of India (RBI) for a small finance bank (SFB) licence by June, Moneycontrol has reported.
“I think (the application for SFB licence will be moved) sometime around May-June next fiscal year,” it quoted a source familiar with the matter.
Paytm has charted out an ambitious plan to enter the lending business with business partners.
“As and when that application is processed and we were to be given a licence we will obviously look at what we can do in building a loan business with our partners,” it quoted a source.
Last year, Paytm founder and CEO Vijay Shekhar Sharma said becoming a small finance bank would solve a lot of payment problems.
The plan to consider applying for conversion into an SFB was disclosed in the draft red herring prospectus filed by One 97 Communications (Paytm) with SEBI before its initial public offering (IPO) last year.
According to RBI guidelines, existing payment banks with a successful track record of at least five years can apply for conversion into SFB. Paytm Payments Bank got its licence to operate as a payments bank from RBI in 2017.