Mobile payment service Paytm on Tuesday received a formal nod from the Reserve Bank of India to launch its Paytm Payments Bank. "Today, Reserve Bank of India gave permission to formally launch Paytm Payments Bank. We can't wait to bring it in front of you," the company said in a blog post .

With Paytm Payments Bank, the company which served as a mobile wallet, until now, aims to become a benchmark in world of banking, it said. "At Paytm Payments Bank, our aim is to build a new business model in banking industry, focussed on bringing financial services to 100's of millions of un-served or underserved Indians. With power of technology and innovation-at-scale, we aim to become a benchmark in world of banking," it added.

Paytm Payments Bank Ltd is largely owned by One97 Communication founder Vijay Shekhar Sharma. Sharma and One97 have already invested a sum of Rs 220 crore into the project, expected to launch sometime within the next 30-60 days, in parts of Uttar Pradesh to begin with. With the RBI approval, Paytm's digital wallet will also become part of Paytm Payments Bank Ltd.

Paytm has amassed over 5 million new users since November 9, the day when the Prime Minister Narendra Modi-led central government announced that all Rs 500 and Rs 1,000 note were no longer legal tender. The government has since been pitching for a cashless economy wherein mobile payments will invariably play a crucial role.

As of November 21, 2016 Paytm had registered over 7 million transactions worth Rs 120 Crore in a day. "The company is currently doing more transactions than the combined average daily usage of Credit and Debit Cards in India," the company had recently claimed.

Paytm Payments Bank will notably offer loans, wealth management and insurance. But since payments banks are not allowed to lend loans on their own, Paytm will have to rely on partnerships to sell their banking products via its platform.

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