Payment Banks – A review

Hello Friends,

As various Banking exams will be going to held in the upcoming days. We are here with an article describing all about Payment Banks.

Payments banks are a new model of banks conceptualised by the Reserve Bank of India (RBI).They are New stripped-down type of banks, which are expected to reach customers mainly through their mobile phones rather than traditional bank branches.

Who has Reserve Bank granted in-principle approval to be a payment bank?

Aditya Birla Nuvo Ltd
Airtel M Commerce Services Ltd
Cholamandalam Distribution Services Ltd
Department of Posts
Fino PayTech Ltd
National Securities Depository Ltd
Reliance Industries Ltd
Dilip Shantilal Shanghvi
Vijay Shekhar Sharma
Tech Mahindra Ltd
Vodafone m-pesa Ltd

What they can and can’t do

They can’t offer loans but can raise deposits of upto Rs. 1 lakh, and pay interest on these balances just like a savings bank account does.
They can enable transfers and remittances through a mobile phone.
They can offer services such as automatic payments of bills, and purchases in cashless, chequeless transactions through a phone.
They can issue debit cards and ATM cards usable on ATM networks of all banks.
They can transfer money directly to bank accounts at nearly no cost being a part of the gateway that connects banks.
They can provide forex cards to travellers, usable again as a debit or ATM card all over India.
They can offer forex services at charges lower than banks.
They can also offer card acceptance mechanisms to third parties such as the ‘Apple Pay.’