INDIAN PAYMENT BANKS
WHAT ARE PAYMENT BANKS IN INDIA ?
A Payment Bank is a type of Non- full service Bank . They can receive deposits , make payments and arrange Remittance facility for their customers . They will not be able to take up lending activity or accept Term deposits . Such banks can give facilities of internet banking to their customers. They can issue debit cards , but cannot issue credit cards . They can sell Insurance policies and mutual funds . They can also act as business correspondents of regular commercial banks .
QUOTE : " Payment Banks are Feeders and not Threat to Big banks "
Sri Raghuram Rajan , Governor of Reserve Bank of India
Basically Payment Banks would help migrant workers , small households , small businesses and unorganised sectors who require minimum banking facilities like Remittances , Deposits etc . On 19th august 2015 , Reserve Bank of India has given licence or in -principle approval to 11 entities for opening such banks .
The eleven companies include:
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 Shanghvi, IDFC, Uninor.
Vijay Shekhar Sharma (Promoter of Paytm)
Tech Mahindra Ltd.
Vodafone mPesa Ltd.
The minimum capital requirements for such banks is Rs 100 crores . New licencees are directly to open at least 25% of the branches in unbanked rural areas . The Payment Banks have to invest their funds in Government bonds . 25 % of their funds can be kept in a bank account of a commercial bank .
RBI has initially limited a maximum ceiling of Rs 1,00,000 Balance for accounts / deposits per customer of such Payment Banks .
YOU CAN KEEP RS 2.00 LAKHS BALANCE IN PAYMENT BANK ACCOUNT
Dated 07.04.2021 : As per the present Guidelines for Licensing of Payments Banks issued by RBI , payments banks are allowed to hold a maximum balance of ₹ 1 lakh per individual customer. However RBI has decided now to enhance the limit of maximum balance at end of the day from ₹1 lakh to ₹2 lakh per individual customer. A circular in this regard will be issued by RBI shortly . RBI has enhanced the limit after reviewing the performance of payments banks and with a view to encourage their efforts for financial inclusion and to expand their ability to cater to the needs of their customers, including MSMEs, small traders and merchants .
To go through RBI Notification in this regard , CLICK HERE
List of payment Banks in India :
For the brief details about individual payment banks , read the following paragraphs .
One may go to individual bank's website to know fully about their operations , charges they levy etc .
1. AIRTEL PAYMENTS BANK LIMITED : Airtel Payments Bank was launched in January 2017, by Bharti Airtel, India’s largest telecom provider . Airtel Payments Bank offers following services :
SAVINGS BANK ACCOUNTS : Open a Savings Bank account and get free personal accident insurance cover of Rs 1 Lakh and earn 3.0% rate of interest . Get an online debit card . Deposit cash at any Banking Point in your vicinity Withdraw cash through banking points or select bank ATMs . Buy third party insurance products Transfer money to any bank account in India through IMPS or UPI . Recharge prepaid mobiles/DTH and pay utility bills (electricity, water, gas, postpaid, etc.) . Book bus and train tickets .
DIGITAL WALLET : You can have Airtel Money Wallet, the digital wallet of Airtel Payments Bank. You can make online/offline digital payments, recharge your phone, pay utility bills, and much more with Airtel Money Wallet. The wallet provides you with an option to make simple, secure and quick payments through your phone. With Airtel Money Wallet, you can:
MAKE DIGITAL PAYMENTS : Make digital payments at thousands of online and offline merchants through
a. QR Code Scanning b . Payment to a phone number c. BHIM UPI 4. Merchant Initiated Payment .
You can also transfer money, recharge prepaid mobiles/DTH, pay utility bills, book bus / train tickets.
INDIA POSTS PAYMENT BANK :
Dated 01.09.2018 : Prime minister Mr Narendra Modi inaugurated Indian Post Payments Bank ( IPPB ) at a function held in New Delhi today . The Payments Bank is backed by a vast network of Post offices all over India run by Postal Department of Government of India . He launched 650 branches of the new payments bank , 3250 access points and a mobile app of the bank . The IPPB will utilize more than 3 lakh postmen spread across India to deliver door step financial services . The services will include opening of accounts , cash deposit / withdrawals , money transfer , deposits and insurance .
To go to website of the bank , CLICK HERE
India Post Payments Bank (IPPB) is a 100% government owned payments bank operating under the Department of Posts, Ministry of Communications . It utilizes all of India's 155,015 post offices as access points and 3 lakh postal postmen and Grameen Dak Sewaks to provide Door step services .
The bank offers following services :
1. Deposits : Savings Bank & Current Account
2. Money Transfers
3. Direct Benefit Transfers from Government Agencies
4. Third party products like Loans , Insurance & Investments . post office Deposits
5. Bill & Utility Payment like Telephone Bills , electricity & water bills
6. Merchant Payments
FINO PAYMENT BANK :
Fino Payments Bank is a fully owned subsidiary of Fino Paytech Ltd. . It was the first payments bank to go live with 410 branches and more than 25,000 banking points on day one. The bank was incorporated on 4th April, 2017 .
The services offered include
1. Domestic Money Transfers & International Money Transfer
2. Current or Savings Account .
3. Aadhaar Enabled Payment System (AEPS)
4 . Cash at Point of Sale(POS) .
5 . Bill Payments , Mobile / DTH Recharge
6 . Cash Management Services (For Multiple Clients)
7 . Travel Bookings
JIO PAYMENT BANK :
Reliance Industries Limited partnered with the State Bank of India to establish Jio Payments Bank Limited, . It was incorporated in November 2016.
The bank offers usual Bank account , digital payments , money transfer , Bill payment services through its Myjio App .
Any Indian resident above 18 years of age can open a Jio Payments Bank account with zero balance and with no charges and penalties .
NSDL Payments Bank
NSDL Payments Bank, established in 2018, aims to bring digital financial services to everyone, especially those with limited access to traditional banks. Backed by National Securities Depository Limited (NSDL) . Account holders enjoy round-the-clock access to services like zero balance savings accounts, digital debit cards, and remittance facilities through its flagship app - NSDL Jiffy. Through its extensive network of BC Agents, NSDL Payments Bank facilitates basic banking transactions like AePS, Micro ATMs, and DMT nationwide. This network, comprising over 20,00,000 BC Agents and 3164 Customer Service Points, covers 97% of the country across 18,500 pin codes. The bank actively collaborates with government entities, fintech firms, and other financial institutions to expand its offerings .
PAYTM PAYMENTS BANK LIMITED : Paytm Payments Bank is India’s only mobile-first bank with zero balance - zero digital transaction charge accounts. It offers following services :
1. Deposits : Savings Bank & Current Account
2. Money Transfers
3. Salary Accounts
4. PayTM Wallet
5. Bill & Utility Payment like Telephone Bills , electricity & water bills
6. Merchant Payments
PayTM Payment Bank prohibited from taking new customers effective from 11.03.2022
If you are a customer of the Paytm Payment Bank :
Dated 22.02.2024 : If you have wallet , Fastag, National common mobility card etc issued by Paytm Payment Bank or having savings , current account or any other account with them , the following fresh directions from RBI will apply from March 15, 2024 :
1. Deposits : After March 15, 2024, you will not be able to deposit money into your account with Paytm Payments Bank. No credits or deposits other than interest, cashbacks, sweep-in from partner banks or refunds are allowed to be credited. .
2. Withdrawals : Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc will be permitted without any restrictions, up to their available balance .
3. No other banking services, like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facility will be provided by the bank after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024). However, for the purpose of for withdrawal or utilisation of available balance by customers or wallet holders), such fund transfers including AEPS, IMPS and UPI will be allowed anytime
4. RBI has directed the Paytm Bank to facilitate withdrawals up to their available balance from all accounts and wallets, excluding the ones that are frozen or lien marked by Law Enforcement or judicial authorities .
5. Merchants who accept payments using a Paytm QR code, Paytm soundbox or Paytm POS terminal, linked to another bank account (not with Paytm Payments Bank). Can continue to use this set-up even after March 15, 2024 .
6. NO NEW ACCOUNTS : The business restriction dated March 11, 2022, prohibiting Paytm Payments Bank from onboarding any new customers for any of its services continues to be in force. Hence, Paytm Payments Bank cannot onboard any new customers after March 11, 2022.
To read RBI PRESS RELEASE DATED 16.02.2023 , CLICK HERE
RBI TAKES ACTION ON PAYTM PAYMENT BANK UNDER SECTION 35A
Dated 01.02.2024 : In March 2022 , the Reserve Bank of India,, had directed Paytm Payments Bank Ltd (PPBL ) to stop taking new customers . Now the Comprehensive System Audit report and subsequent compliance validation report of the external auditors of the bank has revealed persistent deficiencies warranting further supervisory action by RBI . As per the press release dated 31.01.2024 , , the bank cannot take further deposits from its customers after February 29, 2024. However customers can continue withdraw the available balances from the bank .
The press release reads as follows :
" Now in exercise of its powers under section 35A of Banking Regulation Act, 1949 and all other powers enabling it in that behalf, the Reserve Bank of India, has directed PPBL as below:
No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime.
Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, upto their available balance.
No other banking services, other than those referred in (ii) above, like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facility should be provided by the bank after February 29, 2024.
The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024.
Settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) shall be completed by March 15, 2024 and no further transactions shall be permitted thereafter. "
To read press release of RBI dated 31.01.2024 , CLICK HERE
PayTM Payment Bank prohibited from taking new customers
Dated 12.03.2022 : Reserve Bank of India has yesterday, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors.
This action is based on certain material supervisory concerns observed in the bank.