Payment Banks

Payment Banks

 

  On August 20, 2015, the Reserve Bank has given approval for banking transactions by establishing payment banks for 11 industries and companies. On this backdrop, some important information about the payment banks..

 Dr. Nachiket Mor Committee


On September 23, 2013, RBI Director, Dr. Under the chairmanship of Nachiket Mor, a committee of Comprehensive Financial Services for Small Businesses and Low Income Households was set up.
The committee recommended the establishment of a payment bank on January 7, 2014.
The guidelines were submitted in 27 November 2014. Accordingly, there was a total of 41 applications from the Reserve Bank for making a limited banking business as a payment bank.
Accordingly, Under the chairmanship of Nachiket Mor, the committee has scrutinized the applications and approved the names of the eligible candidates in the meeting.

 What is a payment bank or a payment bank?


Various transactions are currently going online or through the card to increase the transaction. In such a situation, the concept of payment bank was introduced for the purpose of making money through systematic transactions.
Accordingly, the technical construction or arrangement for transactions done by online or card holdings is done by private companies.
The customer can make the payments in his regular bank account by filling this payment bank account online or by calling on it.
These transactions can also be viewed as a medium of 'prepaid' transaction. These banks can not afford any lending money.

 Criteria for payment bank



Minimum capital of Rs. 100 crores
For the first five years, the promoter should have a share of at least 40 percent.
Approval of FDI in payment banks, as per the rules of FDI for private banks.
According to the Banking Regulatory Act, 1949, shareholders will get the right to vote.
It is mandatory to have a branch network from the beginning.
Out of the total branches, 25% of the banking services are not available in the rural areas.

 Work time for 'payment banks'


Payment banks can not handle debt.
Such banks can be given ATM / Debit card to their customers, but credit card can not be given
Payment banks per account holder can not accept deposits of more than one lakh rupees.
They can offer various technologically advanced services like internet banking.
Financial plans such as mutual funds, insurance products, etc. can be sold by these banks.
Non-resident Indians can not open an account in these banks.
Interest rates on savings account will be given as interest.
Transfer of money through mobile phone possible
It is possible to deal with payment without paying check, bill payment, vinor purchase and phone.
There will be no charges for depositing money in a bank account.
Forward services to the passengers at lower rates than banks.

11 industry and companies permitted by the Reserve Bank to set up payment banks
Aditya Birla Nuvo Limited Airtel M Commerce Services Ltd.
Indian Postal Department of Cholamandalam Distribution Services
Fino Petech Ltd. National Securities Depository Ltd.
Reliance Industries Limited Tech Mahindra Ltd.
Vodafone M-Money Limited Vijay Shekhar Sharma
Dilip Shantilal Sanghvi
The primary sanction given by the Reserve Bank will be for eligible 18 months for the applicants. During this period, these companies have to meet the conditions laid down by the central bank. Then they will actually get final approval to do business in the bank.

 Important


In April 2014, the Reserve Bank of India has allowed two financial institutions like IDFC and Bandhan to make perfect banking business.
The implementation of the bank will start from August 23, while IDFC Bank will start on October 1.
There are 27 public, 20 private, 44 foreign and 56 departmental rural banks in the country today.
Payment Banks Payment Banks Reviewed by S Current Affairs on January 07, 2019 Rating: 5
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