Paytm parent company One97 Communications has raised $60 million from Taiwanese chip manufacturer MediaTek, part way to a $300 million target that will fund the mobile commerce firm's move into the Indian banking sector.
Last year Paytm - which is 40% owned by Chinese Web giant Alibaba - was one of 11 applicants to get in-principle approval from the Reserve Bank of India to set up so-called payments banks.
Designed to help boost financial inclusion, payment banks will be able to take deposits of up to Rs 1 lakh, issue debit and ATM cards, and facilitate online transactions, but are not allowed to lend money.
In May, Paytm gave Wipro a one year contract to help it build a core banking system that meets accounting and regulatory requirements including compliance with anti-money laundering rules.
The $60 million investment by MediaTek values the firm at $5 billion. The company says it is in talks with other investors and expects to reach its $300 million traget in the coming months.