- Key features of Payments Banks in India
- The objectives of the Payments Banks in India
- Features of Payments Banks
- Activities that may Be Performed By Payment Banks
- Activities that can’t Be Undertaken by Payment Banks
- Advantages of getting Payment Banks
Key features of Payments Banks in India
Currently, there are half a dozen payment banks operational in India that were at the start of eleven. The rules for the institution of payment banks were issued on twenty-four November 2014 by the bank 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. Bank of India had issued tips on November twenty-four, 2014, for fitting payment banks within the country.
The Payments banks can meet the wants of the general public with some restrictions; just like the payments, banks are authorized to open and save accounts however cannot issue a MasterCard to the purchasers.
The objectives of the Payments Banks in India
According to the bank of India (RBI) knowledge, virtually hour of the individuals in the country are still not connected with the banking sector. This includes several lower-income people; the World Health Organization board’s rural areas of the country, add unorganized sector, and infrequently migrate to cities/abroad in the employment search.
The main objectives of fitting of payments banks are to make sure the monetary inclusion by providing payments/remittance services to migrant labour hands, gap up little savings accounts of little business holders, low-income households, and staff of the unorganized sector.
Features of Payments Banks
Payments banks can do most of the work that’s presently being done by industrial banks, however, the payments banks can work beneath bound restrictions like;
- Because the industrial banks, the payment banks also will settle for the money of the individuals as a deposit however the limit is fastened, which suggests the payments banks will settle for deposits up to a most of Rs. one hundred thousand 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 account of their customers.
- Payments banks cannot give loans or disposition services to customers.
- Payments banks cannot settle for deposits from the Non-Resident Indians (NRIs). It means; that the individuals of Indian origin World Health Organization 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 approximate these accounts.
- Payments banks can deposit the quantity within the type of a money Reserve quantitative relation (CRR) with run as different industrial banks do.
- Payments Banks can invest a minimum of seventy-fifth of its demand deposits in government treasury/securities bills with maturity up to at least one year and hold a most of twenty-five you intending to start currents and glued deposits with different industrial banks for operational functions.
- Payment banks will give the power of utility bill payments to their customers and therefore the general public.
- Payments banks cannot open subsidiaries to undertake Non-Banking monetary Services activities.
- Payments bank; approvingly from RBI, will work as a partner with different 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 seem different from different banks.
- Payments banks are allowed to supply web banking and mobile banking facility to their customers.
- Payments banks will become a business representative of the other bank, however itought to fits the rules of the bank of India.
- The payments banks will settle for remittances to be sent to or receive remittances from multiple banks through payment mechanisms approved by RBI, like RTGS / NEFT / IMPS.
Activities that may Be Performed by Payment Banks
- Payment banks will take deposits up to Rs. 2,00,000. It will settle for demand deposits within the type of savings and current accounts.
- The cash received as deposits are invested in secure government securities solely within the type of Statutory Liquidity quantitative relation (SLR). This should quantity to a seventy-fifth of the bank deposit balance. The remaining twenty-fifth is to be placed as time deposits with different regular industrial banks.
- Payments banks are permissible to create personal payments and receive cross-border remittances on these accounts.
- It will issue debit cards.
Activities that can’t Be Undertaken by Payment Banks
- Payment banks receive a ‘differentiated’ bank license from the run and thus cannot lend.
- Payment banks cannot issue credit cards.
- It cannot settle for time deposits or NRI deposits.
- It cannot issue loans.
- It cannot discover subsidiaries to undertake non-banking monetary activities.
Advantages of getting Payment Banks
- Expansion of rural banking and monetary inclusion.
- Expansion of the formal economic system.
- Effective different to industrial banks.
- Efficiently deals with low-worth, high-volume transactions.
- Access to varied services.