Banking giant State bank of India’s Chariman Arundhathi Bhattacharya has announced that SBI is developing a low-cost model to compete with payments banks. The low-cost structure will compete with the payments banks and also get access to people living in the remote areas. She that the only advantage which the payments banks would have over other banks is that they would be able to get access to remote parts of the country. She said payments banks would be ahead of the regular banks when it came to their reach in rural households.

SBI’s Plan

• SBI already has about 56,000 business correspondents, operating through point-of-sales machines, across India.
• The bank will also soon open customer service points in 500 unbanked gram panchayats in West Bengal.
• SBI would be opening customer service points (CSPs) in unbanked panchayats and also train youth with minimum education so that they are able to operate a mobile phone, printer and a scanner.
• Bhattacharya said that the mobile wallet which SBI had recently launched, Buddy, would also work within the realm of a payments bank.

Payment Banks

• 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.

Check this link – RBI gives in-principle nod to 11 applicants for Payments Banks

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