Objectives of formation of payment banks:
Till now India’s existing banking system is not being able to reach at each corner of the country. There are huge population base living in rural India are not covered under banking system but those rural people with small saving potential need a banking system. New payment banks will provide small saving accounts to them.
Many poor people are migrating from villages to cities for earning opportunities. Such migrant workforce need payments and remittance services to send money to their parents/ relatives who are living at villages where banking system is not available. Payment banks will provide such services to them.
History of formation of payment banks:
Sep, 2013 RBI formed Committee headed by Dr. Nachiket Mor
Jan, 2014 Committee recommended specialized bank “Payment Bank”
Jul, 2014 RBI set up guidelines draft for payment bank
Nov, 2014 RBI released final guidelines for licensing for payment banks
Jan, 2015 Deadline for application for license
Feb, 2015 RBI released names of 41 applicants
Aug, 2015 RBI gave “in principle” license to 11 applicants
“In principle” license is valid for only 18 month within that time frame all license holders need to fulfill all requirement.
The names of 11 applicants who received license for payment bank are
1. India’s Postal department
Large Corporate Houses
4. Aditya Birla Nuva
5. Reliance Industries Limited (RIL)
6. Tech Mahindra
Financial Services Sector
7. Fino Paytech
9. Dilip Sahnghvi
10. Vijay Kumar Sharma
11. National Securities Depository Ltd.
Payment banks will provide services:
- Small savings/deposit accounts (max Rs. 100,000) (can not issue loan)
- Issue ATM cards (can not issue credit cards)
- Payments and remittance services