SUMMARY
Paytm Will Soon Commence Hiring & Recruit About 3000 Employees For Its Payment Bank Services
In order to fund his payment bank, Vijay Shekhar Sharma, founder of Alibaba-backed Paytm, may dilute close to 1% of his stake in his holding company One97 Communications Ltd.
According to the central bank’s mandate, the Indian promoter has to own 51% stake in the payment bank, and the remaining can be owned by corporate entities. Vijay told ET that he aims to fund his 51% stake with debt or equity financing, and hopes to close the funding in the next two weeks.
He also plans to invest about $25 – $50 Mn in the bank, until it becomes profitable. “We will go to the market post-Diwali and tap current investors, banks as well as financial institutions for funding. The stake dilution will be less than 1%,” Vijay said. He is on a tour of the US and China, and is currently in China.
The bank will be named Paytm Payment Bank and according to Vijay, the initial estimates suggest that about $22.5 (INR 150 Cr.) will be required to set up the bank. “We are figuring out whether we require more funds. We have shortlisted a couple of names, but the board has to take a final call on it. The team should be in place by the end of this year,” Vijay added. Consultancy firms, EY and McKinsey have been assigned the responsibilities of preparing a blueprint for the bank and the company hopes to announce its CEO by next month.
The company has also announced today that it will commence hiring for its Payment Bank business. It will recruit about 3000 employees to roll out its Payment Bank services by the first quarter of next fiscal year.
Amit Sinha, VP of Paytm said, “Hiring for Paytm’s Payment Bank is a key focus area. We have planned to get on board about 3,000 people from banking and non-banking backgrounds like FMCG, Telecom, Consulting etc. We will draw on the expertise of a wide cross section of sectors.”
The Payment Bank organisation would also require a significant work force for field jobs, and Paytm would add additional workforce from third-party agencies. A major chuck of the employees will be hired for technology roles and requirements.
The bank would focus on simplifying financial transactions for customers and offering easy saving products. It aims to opens up new opportunities for Paytm’s existing mobile wallet user base by offering new services including debit cards, savings accounts, online banking, and transfers.
In August this year, RBI gave “in principle” approval to 11 entities to run payment banks. Apart from One97 Communications, some of the other entities include Reliance Industries, Airtel M Commerce Services, Vodafone m-pesa Ltd, Tech Mahindra and Idea Cellular’s promoter Aditya Birla Nuvo. These entities have 18 months to start their operations.
After investing $830 Mn against 30% stake in Paytm this September, Alibaba has become the largest investor in the digital payment and ecommerce company. With this transaction, Vijay’s stake came down to about 21% – valued at $3.4 Bn – from 27%. It recently invested about $10 Mn in Chandigarh-based autorickshaw aggregator and hyperlocal delivery startup Jugnoo.
Welcome to Flash Feed, your essential source for breaking news and innovation from around the web – bite-sized and updated all day.
