Payments Bank: All You Need to Know

0
476
Payments Bank All You Need to Know

Payments Bank: All You Need to Know

In 2013, Committee on Comprehensive Financial Services for Small Business and Low Income Households headed by Nachiket Mor, was formed by the RBI. That committee recommended the formation of new category bank called Payments Bank.

In 2015 the RBI gave in-principle licenses to 11 to launch Payments Banks. Out of 11, Three have surrendered their licenses.

The minimum paid-up equity capital for setting up of these banks will be Rs.100 Crore NBFC (Non-Banking Finance Companies), Telecom Companies, Supermarket Chains, Pre- Paid Payment Instrument (PPI) Issuers etc. can apply for Payments Bank license.

These Banks will focus on Payments & Remittances only.

Guidelines for Payments Bank

  • Payments Bank can take deposits only on Current Accounts & Savings Accounts
  • Maximum Balance per Customer is restricted up to 1 Lakh
  • Cannot accept FD’s & RD’s
  • It can issue Debit Card
  • It cannot open NRI Accounts
  • It cannot issue Credit Card
  • It cannot give loans.
  • It can invest depositor’s money in Government Securities only
  • Payments Bank can distribute financial products such as Insurance, Mutual Funds, and Pension Products, accept utility bill payments etc.
  • Liabilities should not exceed 33 times of its net worth
  • Payments banks will be required to invest at least 75%of their demand deposits in Government Securities.

Promoter of the Payments Bank should hold at least 40% of its paid-up equity capital for the first 5 years from the commencement of its business.

Airtel Payments Bank is the first Payments Bank established in India.

Can & Can’t in Payments Bank

CanCannot
Accept demand depositsLend money
Hold only up to Rs. 1 lakh per customerTake NRI deposits
Issue debit cardIssue credit cards
Distribute mutual funds, insurance, pension fund productsSet up a NBFC Subsidiary
Set up branches, ATMs, Business Correspondents
Become business correspondent of another bank

 

List of Payments Bank

1Airtel Payments BankJV between Airtel & Kotak Mahindra Bank
2India Post Payments Bank100% Shareholding with GOI
3Paytm Payments Bank
4National Securities Depository Limited
5Reliance IndustriesJV between Reliance Industries & State Bank of India
6FINO PayTechJV between FINO PayTech & ICICI Bank
7Aditya Birla NuvoJV between Aditya Birla Nuvo Ltd & Idea Cellular
8Vodafone M-Pesa
9Cholamandalam Distribution ServicesLicense Surrendered

 

10Tech Mahindra
11Sun Pharmaceuticals

 

Tagline

India Post Payments Bank – Aapka Bank, Aapke Dwaar

Airtel Payments Bank – Bank Hai Par Alag Hai

SHARE
Previous articleDifference Between RTGS and NEFT