Payment Banks are new banking model constructed by Reserve Bank of India. On September 2013, the RBI constituted a committee ‘Comprehensive financial services for small businesses and low income households’ headed by Dr Nachiket Mor. Its objective was to study how we can increase financial services in India.
On 7 January 2014, the committee submitted its final report. Among its various suggestions, it recommended to introduce a new category of bank called payments bank. Payment bank objective was to spread the payment and financial services to low-income groups, small business and to the remote areas of the country. So that every Indian can have a bank account.
Payment Bank Licence :-
In February 2015, 41 applicants applied for a payments bank licence. Out of the 41 applicants, RBI approved 11 applicants for provisional payments bank licenses :-
- Aditya Birla Nuvo Limited
- Airtel M Commerce Services Limited
- Cholamandalam Distribution Services Limited
- India Department of Posts
- Fino PayTech Limited
- National Securities Depository Limited
- Reliance Industries Limited
- Shri Dilip Shantilal Shanghvi
- Shri Vijay Shekhar Sharma
- Tech Mahindra Limited
- Vodafone m-pesa Limited
At present ( Feb 2019) there are 7 Active Payments Banks. Cholamandalam Distribution Services, Sun Pharmaceuticals and Tech Mahindra have surrendered their licenses. Vodafone m-Pesa Ltd is the only applicant left to set up its payments bank.
7 Active Payments Banks :-
- Airtel Payment Bank ( launch: September 2016 )
- Paytm Payment Bank (launch: November 2017 )
- India Post Payment Bank ( pilot project launch: January 2017; Nationwide launch September 2018 )
- Fino Payment Bank ( launch: April 2017 )
- Aditya Birla Payment Bank ( launch: February 22, 2018 )
- Jio Payment Bank ( launch: April 2018 )
- NSDL Payments Bank ( launch: Oct 2018 )
Important things to know about Payment Banks:-
- Offer both saving account and current account.
- Online Account Opening.
- Higher Interest than Regular bank account.
- Maximum balance allowed – 1 lakh.
- Accept deposits of upto Rs. 1 lakh per individual.
- zero balance account – Do not require to maintain a minimum balance.
- Issues Debit Card.
- Can not issue credit cards or loan.
Payment Banks are somewhat similar to our regular bank accounts. In tern of Transfer funds, using Debit cards etc. But some Features you can not use in Payment Banks. Let’s find out by comparing Payment bank and Regular bank.
||Payment Bank||Regular Bank|
|Saving Account and Current Account||YES||YES|
|Maximum balance allowed||1 Lakh||No Limit|
|Cash Deposit Limit||1 Lakh||No Limit|
|Fixed Deposit/Term deposits/Recurring deposits||NO||YES|
|Internet and Mobile Banking/ Online Account Statement||YES||YES|
|set up their own ATMs||NO||YES|