Paytm Money Ltd., a wholly owned subsidiary of e-wallet and payments bank Paytm, has received a nod from Securities and Exchanges Board of India to become a registered investment adviser, paving the way for the firm to improve its fee income.
The company said it will launch investment and wealth management products by April, it said in a statement issued on March 7.
Paytm Money is currently completing integrations with the respective compliance and regulatory authorities for KYC (know your customer) under the SEBI regulations. It is also integrating all leading AMCs (asset management companies) in India. The platform has planned a limited rollout of investment products starting with direct plan mutual funds investments with zero commissions that will offer customers maximum returns on their investments.Paytm Statement
Vijay Shekhar Sharma, Paytm's founder, was one of the 11 applicants to have received an in-principle nod from the Reserve Bank of India in August 2015 to start a payments bank. Paytm Payments Bank officially started operations in May 2017.
The bank is targeting 5 crore customers by May 2018, Sharma had told BloombergQuint in an interview at the sidelines of World Economic Forum at Davos in January. A financial advisory business would be helpful in achieving this goal, he had said.
“We will do gold, we will do fixed deposits and we trade in mutual funds business as part of Paytm Money,” Sharma had said. Paytm would not, however, enter direct lending as a business, he had clarified.
Under RBI guidelines, a payments bank is not allowed to issue credit to their customers. They are, however, allowed to act business correspondents for other lenders. The partner lender would conduct underwriting and KYC of any such loan to the customer, while the payments bank can source these customers.
Also Read: Paytm Calls WhatsApp's Closed Payments Service Unfair As Cashless War Intensifies
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