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Payments Bank in India

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*Last Updated on: [last-modified]
Payments Bank is a new model of banks conceptualized by the Reserve Bank of India (RBI). These banks can accept a restricted deposit, which is currently limited to Rs.1 lakh per customer and may be increased further. These banks cannot issue loans and credit cards. Both current account and savings accounts can be operated by such banks. Payments banks can issue services like ATM cards, debit cards, net-banking, and mobile banking.
The Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households, headed by Nachiket Mor, was formed by the RBI On 7 January 2014. Among its various recommendations, it recommended the formation of a new category of the bank called payments bank. On 17 July 2014, the RBI released the draft guidelines for payment banks, seeking comments from interested entities and the general public. On 27 November, RBI released the final guidelines for payments banks.

Facilities of Payments Bank:

  • Acceptance of demand deposits, i.e., current deposits, and savings bank deposits from individuals, small businesses and other entities, as permitted. No NRI deposits should be accepted.
  • Payments bank will initially be restricted to holding a maximum balance of Rs.1,00,000/- per individual customer.
  • Issuance of ATM/Debit Cards. Payments banks. However, cannot issue Credit Cards.
  • Payments and remittance services through various channels including branches, Automated Teller Machines (ATMs), Business Correspondents (BCs) and mobile banking
  • Payments bank can accept remittances to be sent to or receive remittances from multiple banks under a payment mechanism approved by RBI, such as RTGS / NEFT / IMPS.
  • The payments bank cannot undertake lending activities.

External Advisory Committee for evaluating Applications of Payments Banks:

The Committee was formed by Raghuram Rajan, Former Governor of RBI, on 4th February 2015.

  1. Chairman: Shri Nachiket M Mor, Director, Central Board of Reserve Bank of India
  2. Ms Roopa Kudva, former MD & CEO, CRISIL Limited
  3. Ms Shubhalakshmi Panse, former Chairman & Managing Director, Allahabad Bank
  4. Shri Deepak Phatak, Chair Professor, IIT Bombay

List of Approved Payments Banks:

There were 41 applicants for Payments Bank. But RBI has granted only 11 applicants to Open Payments Banks on 19th August 2015.
The Approved Applicants are given as below.

Applicant Name Bank Name Launched CEO HQ Interest
Airtel M Commerce Services Limited Airtel 12/01/2017 Shashi Arora New Delhi 7.25%
Department of Posts India Post 30/01/2017 A.P.Singh New Delhi 5.5%
Vijay Shekhar Sharma PayTm 23/06/2017 Renu Satti Noida 4%
Fino PayTech Limited Fino 13/07/2017 Rishi Gupta Mumbai 4%
Aditya Birla Nuvo Limited Aditya Birla 22/02/2018
Reliance Industries Limited Jio 03/04/2018
Cholamandalam Distribution Services Limited Yet to be launched
National Securities Depository Limited Yet to be launched
Shri Dilip Shantilal Shanghvi Yet to be launched
Tech Mahindra Limited Yet to be launched
Vodafone m-pesa Limited Yet to be launched

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