More about payment banks
Posted on: 01/Sep/2015 11:20:40 AM
The payment bank status was granted recently to 11 entities by the RBI. Some of the entities are big companies such as Reliance Industries, Aditya Birla Nuvo, Tech Mahindra, Airtel and Vodafone.
So what exactly are payment banks? To put it simply, payment banks are those that are expected to reach customers through mobile phones rather than the bank branches that are traditionally used. These banks cannot offer loans. But they can accept deposits of upto Rs. 1 lakh. They will also pay interest on the deposit just as the savings bank accounts do. Payment banks allow transfers and remittances through mobile phones. Their services include automatic payment of bills, cashless purchases and cheque less transactions. Payment banks can issue debit and ATM cards that can be used in any ATM machine. Transfer of money can be done directly to bank account. These banks are also authorizedto provide forex cards that can be used as debit or ATM cards all over India. The banks can offer competitive forex services as well.
Here is a list of the 11 entities that have been given approval by the RBI:
- 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 Shantilal Shanghvi
- Vijay Shekhar Sharma
- Tech Mahindra Ltd
- Vodafone m-pesa Ltd
So what makes payment banks so special? The move redefines banking in India. Payment banks will target migrant laborers, low income households and small businesses by offering savings accounts and remittance services that have a low transaction cost. The new banks will help those from lower economy groups to get introduced into formal banking by performing cashless transactions. It is uneconomical for banks to open branches in remote areas. These areas will be benefited by this service. Since payment banks over money transfers through mobile phones, more people can benefit from bank services. Government schemes that directly benefit the citizens, especially when it comes to healthcare, education and gas, can be greatly carried on efficiently.
