PAYMENT BANK

RBI has taken an advanced step to push our financial inclusions by

providing the guidelines for licensing differentiated banks such as Payment
Banks and Small Finance Banks.On November 27 2014, RBI

released the final guidelines for payment banks. These guidelines will allow
mobile firms and other valid entity to enter the banking field to service the
individuals and small businesses.

What is Payment Bank?

The main objective of the payment bank is providing small savings accounts
and payments or remittance services to low income households,small
businesses,other unorganized sector entities and other users.

On 23 September 2013, Committee on Comprehensive Financial Services for

Small Businesses and Low Income Households, headed by Nachiket Mor,
recommended for a new type of bank called payments bank.

Guidelines and Regulations provided by RBI for Payment Banks

Can
i.These banks can able to operate current accounts and saving accounts.
They can issue ATM or Debit cards, Net Banking and Mobile Banking
facilities to their customers.

ii. The payment banks can take restricted deposits which is currently limited
to 1 lakh per customer.

iii. They can distribute the non-risk financial products such as mutual
funds and insurance.
Can't

They don't have rights to provide lending services such as credit cards and
issue loans facilities.

Other Guidelines and Regulations to follow

1.The initial minimum capital requirement of 100 crore is mandatory.

FDI of 74% is allowed.

2. The promoter contribution must be 40% for the first 5 years.

3. Non-resident Indians (NRI) will not be allowed to open accounts in

payment banks.

4.They can be integrated with your savings bank accounts via IMPS and
NEFT transfers and could enable transfers and remittances through a mobile
phone.

5. Payment banks must maintain CRR minimum 75% of demand deposits in

government bonds of upto
one year.

6.They must maintain maximum 25% in current and fixed deposits with
other scheduled commercial banks for operational purpose and liquidity
managemen.

7. 25% of its branches must be in the unbanked rural area. The bank.
must use the term "payments bank" in its name to differentiate it from other
types of bank.

8. The banks will be licensed as payments banks under Section 22 of

the Banking Regulation Act, 1949, and will be registered as public limited
company under the Companies Act, 2013.

9.The voting rights will be regulated by the Banking Regulation Act, 1949.
The voting right of any shareholder is capped at 10% now.
Payment banks cannot lend money, so from where will they
get profit?

The payment banks are allowed to invest their customers deposit into
government securities from which they can raise money.

How does the Payment Banks reach their customers in far flung areas?

i.Payment bank will reach through mobile phones. Further, bank

correspondents can be employed to make reach the services of Payment
Bank to every citizen in villages.

ii. The recharge shops can play a crucial role in Payment bankexpansion.A
mobile wallet can be used for transactions.

List of Active Payment Banks:

Airtel payment bank

Fink payment bank
India posts payment bank
Paytm payment bank
Nsdl payment bank
Jio payment bank

Close
Aditya Birla payments bank
Cholanadlam payment bank
Sun pharmaceutical
Tech Mahindra
Vodafone mi paisa