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Thursday, 20 August 2015

Payment Banks in India

Payment Banks in India

payment bank RBI India

The Reserve Bank of India gave license to  11 companies for setting up payments banks in India.

The companies allowed by RBI to set up payment banks are -

  1. Aditya Birla Nuvo
  2. Airtel M Commerce Services
  3. Cholamandalam Distribution Services
  4. Department of Posts
  5. FINO PayTech
  6. National Securities Depository
  7. Reliance Industries
  8. Dilip Shanghvi, founder of Sun Pharmaceuticals
  9. Vijay Shekhar Sharma, CEO of Paytm
  10. Tech Mahindra
  11. Vodafone M-Pesa
What is a Payment Bank -
A payments bank is a type of non-full service niche bank in India. A bank licensed as a payments bank can only receive deposits and provide remittances. It cannot carry out lending activities. This type of bank was created to help India reach its financial inclusion targets.  This type of bank is targeted at migrant labourers, low income households, small businesses, and other unorganised sector entities.

A payments bank is different from a regular bank. Here are the activities a payments bank can and cannot do.

1. Like a regular bank, a payments bank too can accept deposits. However, at the moment, a payments bank is restricted to hold a maximum deposit of Rs 100,000 per individual.

2. A payments bank can offer both current and savings accounts.

3. It can also issue ATM and debit cards. However, it cannot issue a credit card.

4. It cannot accept NRI deposits.

5. It can offer payments and remittance services via ATMs, business correspondents and mobile banking. Cash out facility can also be provided at point of sale terminals.

6. A payments bank cannot provide lending services.

7.  A payments bank can receive or send remittances from multiple banks via RTGS / NEFT / IMPS payment mechanism.

8. A payments bank can offer simple financial instruments like mutual funds and insurance.

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