- Payment Banks
- Objectives of the Payments Banks
- Emergence of Payment Banks
- Features of Payments Banks
Currently, there are six payment banks in operation in India that were ab initio eleven. The rules for the institution of payment banks were issued on twenty-four Gregorian calendar month 2014 by the depository financial institution of India. Payment banks are allowed to open a bank account and accounting however they cannot issue a MasterCard.
The payments banks are “differentiated banks” as compared to industrial banks. Depository financial institution of India had issued tips on Gregorian calendar month twenty-four, 2014, for putting in payment banks within the country.
The Payments banks can meet the requirements of the general public with some restrictions; just like the payments, banks are authorized to open this and saving accounts however cannot issue a MasterCard to the purchasers.
“Payments Banks are niche banks, set up by the depository financial institution of India to add the agenda of monetary inclusion. These banks can offer tiny savings accounts and payments/ remittal services principally to the migrant labor workforce, low-income households, tiny businesses, etc.
Objectives of the Payments Banks
According to the depository financial institution of India (RBI) information, virtually all individuals of the country are still not connected with the banking sector. This includes several lower-income people; who sleep in rural areas of the country, add unorganized sector and infrequently migrate to cities/abroad within the search of employment
The main objectives of putting in of payments banks are to confirm the money inclusion by providing payments/remittance services to the migrant labor workforce, gap up tiny savings accounts of tiny business holders, low-income households, employees of the unorganized sector.
The emergence of Payment Banks
- Twenty-three Sep 2013: The run batted in fashioned a committee on comprehensive money services for tiny business and low-income households was fashioned by the run batted in headed by Nachiket Mor.
- Seven January 2014: NachiketMor committee submitted its final report with the varied recommendations it suggested for the formation of a replacement class of bank known as the payment bank.
- Seventeen Gregorian calendar month 2014: The run batted in issued the draft tips for the payment banks, invitatory suggestions comments from interested entities and therefore the general public.
- Twenty-seven Gregorian calendar month 2014: run batted in free final tips for payment banks.
- In Feb 2015, run batted in free the list of entities that had applied for a payment banks license. There have been forty-one candidates. It conjointly proclaimed that the external consultative committee (EAC) headed by the Nachiket Mor would appraise the license applications.
- Twenty-eight Feb 2015: throughout the presentation of the budget it had been proclaimed that Indian post can use its giant networks to run the payment banks.
- Six Gregorian calendar month 2015: the external consultative committee submitted findings. The person entities were examined for his or her money documentation and government problems.
Features of Payments Banks
Payments banks can do the majority of the work that’s presently being done by industrial banks, however, the payments banks can work below sure restrictions like;
- Because the industrial banks, the payment banks also will settle for the cash of the individuals as a deposit however the limit is mounted, which implies the payments banks will settle for deposits up to a most of Rs.1Lakh from a client.
- Payments banks; are entitled to issue ATM or debit cards to their customers however cannot issue a MasterCard.
- Payments banks; are authorized to open each savings and current accounts of their customers.
- Payments banks cannot offer loans or disposal services to customers.
- Payments banks cannot settle for deposits from the Non-Resident Indians (NRIs). It means; the individuals of Indian origin who have settled abroad cannot deposit their cash within the payment banks.
- Payments banks are allowed to create personal payments and receive remittances from the cross come close to these accounts.
- Payments banks can need to deposit the quantity within the type of a money Reserve magnitude relation (CRR) with a run batted in as alternative industrial banks do.
- Payments Banks can need to invest a minimum of seventy-fifth of their demand deposits in government treasury/securities bills with maturity up to at least one year and hold a most of twenty-five you looking to start currents and glued deposits with alternative industrial banks for operational functions.
- Payment banks will offer the ability of utility bill payments to their customers and therefore the general public.
- Payments banks can’t open subsidiaries to undertake Non-Banking money Services activities.
- Payments bank; approvingly from run batted in, will work as a partner with alternative industrial banks and can also sell mutual funds, pension merchandise, and insurance merchandise.
- Payments banks should use the word “Payments Bank” in their names to appear completely different from alternative banks.
- Payments banks are allowed to produce net banking and mobile banking facility for their customers.
- Payments banks will become a business representatives of the other bank, however, they’ll need to fits the rules of the depository financial institution of India.
- The payments banks will settle for remittances to be sent to or receive remittances from multiple banks through payment mechanism approved by run batted in, like RTGS / NEFT / IMPS.