20 August 2015

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Know 12 Facts about Payment Bank what they can and cannot do

Know 12 Facts about Payment Banks what they can and cannot do

The Reserve Bank of India has decided to grant “in-principle” approval to the following 11 applicants to set up payments banks under the Guidelines for Licensing of Payments Banks issued on November 27, 2014 (Guidelines).
1-Aditya Birla Nuvo Limited
2-Airtel M Commerce Services Limited
3-Cholamandalam Distribution Services Limited
4-Department of Posts
5-Fino PayTech Limited
6-National Securities Depository Limited
7-Reliance Industries Limited
8-Shri Dilip Shantilal Shanghvi
9-Shri Vijay Shekhar Sharma
10-Tech Mahindra Limited
11-Vodafone m-pesa Limited

The minimum paid-up equity capital for payments banks is Rs 100 crore. This means owners of payments banks have to put in a minimum of Rs 100 crore in return for equity in the company.

Details of “in-principle” approval -
The “in-principle” approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, the Reserve Bank would consider granting to them a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular licence is issued, the applicants cannot undertake any banking business.

What is Payments Bank?
Payments bank licence will allow companies to collect deposits (initially up to Rs 1 lakh per individual), offer Internet banking, facilitate money transfers and sell insurance and mutual funds.

Payment banks can accept deposits upto to Rs. 1 lakh per customer, and are allowed to pay customers interest on the money that is being deposited. They can be used for either current accounts or savings accounts.

A payments bank can offer both current and savings accounts.

It can also issue ATM and debit cards. However, it cannot issue a credit card.
The payment banks ATM or debit cards will also work on all banks' ATM machines.

It cannot accept NRI deposits.

A payments bank can offer simple financial instruments like mutual funds and insurance.

A payments bank can receive or send remittances from multiple banks via RTGS / NEFT / IMPS payment mechanism.

The payment banks are only allowed to invest the money customers deposit into government securities.

Loan and Payment Banks –
The RBI guidelines say that the payments bank cannot undertake lending activities. So if you want to apply for loan, you will have to go to the regular banks which issue loans.

The payments bank licence will enable the network of 1, 54,000 post offices to offer banking services to the masses in the country.

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Thursday, August 20, 2015

Tags – Payment Bank Working Process Powers do donts


Destination Infinity August 20, 2015  

Interesting. Wonder what's there in it for mobile phone companies...

Destination Infinity

rudraprayaga August 21, 2015  

Thank you for the info.