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    Payment Bank

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    Rohit Singh
    The Reserve Bank of India released guidelines in 2014 allowing for the establishment of payment banks to promote financial inclusion. Payment banks can accept deposits up to 1 lakh per customer and offer services like remittances, but cannot provide credit. They must maintain 75% of deposits in government bonds and use at least 25% of branches in rural areas. Examples of payment banks include Airtel, Paytm, India Post, and Jio.

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    Payment Bank

    Uploaded by

    Rohit Singh
    61 views3 pages
    The Reserve Bank of India released guidelines in 2014 allowing for the establishment of payment banks to promote financial inclusion. Payment banks can accept deposits up to 1 lakh per customer and offer services like remittances, but cannot provide credit. They must maintain 75% of deposits in government bonds and use at least 25% of branches in rural areas. Examples of payment banks include Airtel, Paytm, India Post, and Jio.

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    The Reserve Bank of India released guidelines in 2014 allowing for the establishment of payment banks to promote financial inclusion. Payment banks can accept deposits up to 1 lakh per customer and offer services like remittances, but cannot provide credit. They must maintain 75% of deposits in government bonds and use at least 25% of branches in rural areas. Examples of payment banks include Airtel, Paytm, India Post, and Jio.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    61 views3 pages

    Payment Bank

    Uploaded by

    Rohit Singh
    The Reserve Bank of India released guidelines in 2014 allowing for the establishment of payment banks to promote financial inclusion. Payment banks can accept deposits up to 1 lakh per customer and offer services like remittances, but cannot provide credit. They must maintain 75% of deposits in government bonds and use at least 25% of branches in rural areas. Examples of payment banks include Airtel, Paytm, India Post, and Jio.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 3

    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

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