Key Features of Payments Banks in India

Key Features of Payments Banks in India

Banking Awareness – Key Features of Payments Banks in India

Key Features of Payments Banks in India

The concept of Payments banks was introduced by the Reserve Bank of India as part of the digital India initiative. There are only a handful of payment banks in India. This is to make it easier access to financial and banking services to the citizens of the country. India continues to be a unbanked country for several poor people and the concept of Payments banks follows the concept followed in several African countries, where payments banks and wallets were initiated to help create financial inclusion.

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Payments Banks are still considered more of a toy and there are not very serious rules regarding payments banks. However, it is very different from a conventional bank and can be accessed from kiosks, stores or simply from mobile phone or computers with Internet access. Payments banks are really powered by the Internet.

Airtel was the pioneer of the Payments bank in India as it launched India’s first payments bank headquarted in New Delhi. The other large scale Payment bank is Paytm payments bank. India post too has launched its payments bank arm a move that makes the postal service expand itself to a payments banking service. Aditya Birla Group too launched the Aditya Birla Nuvo Bank, a payments bank service. Payments bank are very useful for paying for utilities like Electricity, gas, water bills. Customers also get paid interest rate of 7 percent on Airtel Payments bank account.

Key Features of Payments Banks in India:

  1. The maximum deposits in Payments banks is limited to Rs. 100,000 per individual customer.
  2. Payments banks do not issue credit cards. However, they do issue ATM and debit card
  3. Payments and remittance are through various channels
  4. 25% branches must be in unbanked rural areas.
  5. Payments bank can offer both current accounts and savings accounts.
  6. Payments banks cannot lend money
  7. The minimum paid up equity capital for payments banks shall be Rs. 100 crore
  8. The outside liabilities of a payments banks should not exceed 33.33 times its paid up capital and reserves.
  9. The promoter shall contribute at least 40 percent of the paid up equity capital for the first five years from the date of commencement of the business.

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List of Payments Banks in India:

  1. Aditya Birla Nuvo
  2. Airtel M Commerce Services
  3. Cholamandalam Distribution Services
  4. Department of Posts
  5. FINO PayTech
  6. National Securities Depository
  7. Reliance Industries
  8. Sun Pharmaceuticals
  9. Paytm
  10. Tech Mahindra
  11. Vodafone M-Pesa

Stay tuned for more updates on Key Features of Payments Banks in India!


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