Paytm has applied for a licence to set up a money market mutual fund that will enable the company to expand its financial offerings to consumers.
When contacted, Paytm declined to comment.
The primary objective of a money market fund is to invest in short-term securities.
The company has earmarked an initial investment of Rs. 400 crores to build its banking network over two years.
Also, it launched 'Digital Gold' in April this year to allow its over 200 million users to buy and sell gold through its platform.
At the time of launch, Paytm founder and CEO Vijay Shekhar Sharma had said it was "the first step in Paytm's journey in wealth management".
Paytm seems to be drawing inspiration from its investor, Alipay that set up Yu'e Bao in 2013 that allows Alipay customers to convert the money in their accounts into units of a money market fund, offering them higher interest rates.
According to reports, Yu'e Bao had over $165 billion (roughly Rs. 1,06,565 crores) under management, making it one of the biggest money market funds in the world.
Disclosure: Paytm's parent company One97 is an investor in Gadgets 360.