Existing investors such as Chinese e-commerce giant Alibaba and its arm Alipay are also taking part.

One97 Communication, the parent company of digital payments company Paytm, is in talks to raise $300-350 million or about Rs 2,000 crore as the company gears up to launch the payments bank and aims to boost its e-commerce business, say media reports citing sources.

The fund raising will value the company at $5 billion, say the reports (read here and here).

The jump in valuation from $2.3 billion about 18 months back comes at a time when other startups are struggling to raise funds and even witnessing valuation mark downs.

The investors involved in the fund raising include global financial services major Goldman Sachs, Singapore's Temasek and semiconductor maker MediaTek, say the reports.

Existing investors such as Chinese e-commerce giant Alibaba and its arm Alipay are also taking part, says the report in The Economic Times.

The company plans to deploy the funds across its verticals, including the planned parents bank.

Paytm CEO Vijay Shekhar Sharma had in June expressed hope that the company would launch its payments bank in August. However, there has not been a final word on this yet.

Sharma had told Indian Express that its bank will completely based on mobile platform and that will be the differentiator.

"Financial inclusion is our agenda and we are targeting 500 million users overall. Our banking will be entirely depended on the mobile app," he was quoted as saying in the report.

A recent report in the Mint newspaper had said One97 is planning to hive off the ecommerce business under Paytm E-Commerce Pvt Ltd as Alibaba, its key investor, is planning to make its grand India entry this year.

“We are planning to enter the e-commerce business in India in 2016. We have been exploring very carefully the e-commerce opportunity in this country, which we think is very exciting on the backdrop of Digital India,” Alibaba Group president J. Michael Evans was quoted as saying in a PTI report in March.

The company has been evaluating all opportunities to build the business organically or look at any other thing that might come along.

Evans had then said the company has investments in both payments and e-commerce and the exact strategy will be shaped over the course of the year.

Alibaba is very keen to come to India in a very big way, particularly in the e-commerce segment. The company is exploring the potential whether to go on their own or set up shop with someone else.

Recently, The Times of India reported that the company has held talks to buyout Shopclues, an e-commerce market place valued at $1 billion.