Paytm sets up Paytm Financial Services
Paytm sets up Paytm Financial Services

The Alibaba-backed Paytm has set up a new company, Paytm Financial Services, which will sell financial products like insurance and mutual funds to its planned payments bank account holders. For Paytm Payments bank, selling these financial products will be the core source of revenue as it cannot lend money, as per rules laid out by the Reserve Bank of India.

Going forward, the company plans to sell these products to users other than those who are account holders at its payments bank.

Paytm hired a former Lehman Brothers executive Krishna Hegde for this business, last year. For now, Paytm has not made any investment commitments for this separate entity.

A spokesperson of Paytm said, "It is a 100% subsidiary of One97 Communications. The company will offer digital financial services. "

Last year three payments bank license holders dropped their plans to start payments bank citing sustainability concerns in the business. Selling financial products in this situation will be the first obvious source of revenue for Paytm. The Noida-based firm is in talks with multiple financial services companies for partnerships, people aware of the development said.

 
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