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 PAYMENT BANKS IN INDIA 

ADITYA BIRLA PAYMENT BANK TO WIND UP ITS OPERATIONS 
 
Dated  21.07.2019 :  Operations  of  ADITYA BIRLA IDEA  PAYMENTS BANK  , a  joint venture company between   Aditya Birla group and vodafone - Idea cellular  which   started its operation in February 2018 ,  are  being wound up   as per newspapers  reports  .  

It is reported that  the board of Directors  of the payment bank have  applied to the regulators for voluntary winding up of the payment bank  .  They have also assured  prompt payment of  the money back to its depositors . Bank is said to have public deposits of  Rs 20 crores . 

  Out of the 11 original licencees   , Tech Mahindra, Cholamandalam Investment and Finance Company , IDFC Bank and Telnor have shut down their operations already . 

INDIA POST PAYMENT BANK

PRIME MINISTER INAUGURATES       INDIA POST PAYMENT BANK 

A post office

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 

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WHAT IS A PAYMENT BANK 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:

1. Aditya Birla Nuvo Ltd.
2. Airtel M Commerce Services Ltd.
3. Cholamandalam Distribution Services Ltd.
4. Department of Posts
5. Fino PayTech Ltd.
6. National Securities Depository Ltd.
7. Reliance Industries Ltd.
8. Dilip Shanghvi, IDFC, Uninor.
9. Vijay Shekhar Sharma (Promoter of Paytm)
10. Tech Mahindra Ltd.
11. 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  . 

  Payment Banks  are regulated by    Reserve Bank of India  .  Initial promoters of licencees entities should     own 40 %   capital for  at least first 5 years  .  Foreign  share holding is permissible  as per FDI policy for private sector banks .  The voting right is capped 10 %  for any single shareholder .  
  
 The draft guidelines   issued by  Reserve  Bank of India on Payment Banks  is available on their website .  To reach the guidelines . CLICK HERE 

 

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WHAT WE CAN EXPECT FROM PAYMENT BANKS ?

Payments banks   are expected to  depend upon mobile and ATM infrastructure to provide transactional banking services. Opening an account is expected to be like acquiring a pre-paid mobile number.   With the  intense competition  the new banks would generate may  reduce  charges for remittances, fund transfers and other banking transactions. Customers who do not have the means to maintain minimum balance will   also   can maintain accounts with Payment banks  as revenues of payment Banks are earned through transaction charges .   

As per  RBI licence , new payment banks are to be set up within 18 months .   But it is  generally believed that many such licencees may establish their banks  much earlier than the stipulated time frame. 

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Active Payment Banks in India

 Following  Payment  Banks have  started their operations   ( CLICK ON THE NAME OF THE BANK TO GO TO THEIR WEBSITE ) 
​
1. AIRTEL PAYMENTS BANK LIMITED  :   It was Airtel M Commerce Services Ltd when   it got licence from RBI .  It is the first payment bank to get licence and  to  start operations .  Airtel Mobile number of the customer  will be the account number  at the bank .   It is paying up to 7.25% pa interest on the SB accounts . It is also offering free accedent insurance cover for rs 1.00 lakh for its customers . 

2. PAYTM PAYMENTS BANK LIMITED  :  The bank boasts of free of charges on-line services .  It pays a  interest of 4% pa on its accounts 
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3. INDIA POSTS PAYMENT BANK     :  It is a  Public sector  Bank promoted by Indian Post   and started its operations in January , 2017 . It is paying an annual interest rate of 5.5%  . 

4. FINO PAYMENT BANK  :   It has started its operations with opening of 410 branches . it is offering an interest rate of 4 % pa .   

5 .JIO PAYMENT BANK  : It is a collaboration of reliance Industries Limited and State Bank of India   and it is expected to begin its  full scaled operations In July 2019  

6. ADITYA BIRLA IDEA  PAYMENTS BANK  :   The joint venture company between   Aditya Birla group and Idea cellular   started its operation in February 2018 . now in July 2019 , newspapers have reported that the operations are  being wound up . 

One may go to individual bank's website to know fully  about their operations , charges they levy etc . 

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