BANGALORE: The RBI approved 11 entities on August 19 the permit to set up of non-lending payment banks. The big names that were granted the “in-principle” nod include Reliance Industries, Airtel, Tech Mahindra, Aditya Birla Nuvo and Vodafone.

Payment Banks

These banks will be accessible by customers on their mobile phones. Apart from some specified services, the new stripped-down type of banks will limit themselves to accepting of demand deposits, Internet banking and remittance services.

These banks will have 18 months of validity for this approval within which they would have to comply with the requirements following the guidelines and serve other condition stated by the Reserve Bank.

Objective

The institutions would look forward to accelerate financial inclusion in India, taking baking to the rural parts of the country. These Payment Banks are initiative to reach low income households, migrant laborers, small businesses, and unorganized sector entities.

41 organizations had applied for payment bank license; however, only 11 entities got the RBI’s approval. The 11 entities that received the ‘in-principle’ approval are:

1. Reliance Industries Ltd

2. Dilip Shanghvi

3. Vijay Shankar Sharma

4. Fino PayTech limited

5. Tech Mahindra Ltd

6. Aditya Birla Nuvo Ltd

7. Cholamandalam Distribution Services Ltd.

8. National securities depository limited

9. Airtel M Commerce Ltd

10. Department of Posts

11. Vodafone m-pesa Ltd

Here’s what these Payment banks can offer:

1. Loans will not offered

2. The bank services will include would automatic payments of bills through phones.

3. Minimum paid-up equity capital required for a Payment Bank is 100 crore

4. Payment banks cannot undertake any non-banking activities or have subsidiaries.

5. Transfers and remittances will be done using mobile phone.

6. Deposit only up to Rs 1,00,000 can be made on which the banks would pay interest on the balances as in savings bank account.

7. Third parties will be provided with card acceptance mechanisms.

8. The promoter will have a stake of minimum 40 percent for the first 5 years.

9. Transfer to other bank accounts will be done without being charged

10. Travelers can have Forex cards that can be used as debit and ATM cards across the nation.

11. Forex services will be offered at a comparatively cheaper rate.

12. Debit cards and ATM cards will be issued that would work on ATMs of all banks including 1,54,000 post offices whereas there would be no provision to issue credit cards.

13. Customers can also purchase insurance and mutual funds.

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