The Reserve Bank of India has selected 11 companies to set up payments banks aimed at granting thousands of citizens access to formal banking. A total of 41 companies had applied for the permit. RBI issues draft guidelines for licensing of payments banks were released for public comments on July 2014 and final guidelines were issued on November 2014. The 11 companies are,
- Aditya Birla Nuvo Limited
- Airtel M Commerce Services Limited
- Cholamandalam Distribution Services Limited
- Department of Posts
- Fino PayTech Limited
- National Securities Depository Limited
- Reliance Industries Limited
- Shri Dilip Shantilal Shanghvi
- Shri Vijay Shekhar Sharma
- Tech Mahindra Limited
- Vodafone m-pesa Limited
Payments Banks
- Objective of payments banks is to increase financial inclusion by providing small savings accounts, payment/remittance services to migrant labour, low income households, small businesses, other unorganised sector entities.
- The minimum capital requirement would be Rs 100 crore
- Payments Banks can accept demand deposits (only current account and savings accounts). They would initially be restricted to holding a maximum balance of Rs 100,000 per customer. Based on performance, the RBI could enhance this limit.
- The banks can offer payments and remittance services, issuance of prepaid payment instruments, internet banking, functioning as business correspondent for other banks.
- Payments Banks cannot set up subsidiaries to undertake NBFC business.
- No credit lending is allowed for Payments Banks.
Test Your Knowledge
Name the Committee which proposed the concept of Payments Banks in January 2014?
