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In today’s era of digitisation, Everything is available online; be it shopping for groceries or apparel or medicines; anything and everything is available. When all commodities are available online, the payment methods have also upgraded to online payment. Collaboration with various private and public banks has enabled the customers to pay digitally via connecting with their banks, making us familiar with the term “Payments Bank”.This article will understand the concept of payment banks and how Paytm, Airtel payments bank and Jio payments bank operate.
Payments Bank
A payment bank operates like any other bank but on a relatively smaller operative scale where the working is similar to other banks with only two restrictions:-
No credit card facilities available
No advancement of loans
Except for these two, it functions versatility by enabling users to purchase and make third party payments, demand deposit acceptance (1 lakh), Net Banking, ATM debit card facility and third-party fund transfers.
In January 2014, a special committee set up by RBI proposed the concept of “Payment Banks”, commonly known as Specialised banks, to cater to the needs of rural income people and small scale businesses, such that by the year 2016, even the rural citizens will be onboard the global banking system.
Types of Payment Banks.
In India, at present, there are six payments banks, namely :
Paytm Payments Bank
Airtel Payments bank
Jio Payments Bank
Fino
India Post Payment Banks
NSDL Payment Banks
Characteristics of Payment Banks
They are separated and not general banks and work on a more limited size. It is necessary to have a base settled up capital of Rs. 100,00,00,000.The Initial Contribution of the promoter to the Payment Bank to the settled up value capital will be 40% for the initial infant years, which might increase in the future.
What can Payment banks make?
A deposit of Rs. Payment banks can take 2,00,000. These banks can consider requesting deposits, reserve funds and current records. The cash received as deposits can put resources into secure government protections just as Statutory Liquidity Ratio (SLR). This should add up to 75% of the interest store balance. The leftover 25% is to be put as time deposits with other booked business banks. Payments banks will be allowed to make individual payments and get cross-boundary settlements on the current records.
What Payment can Banks not make?
These banks can not provide loan facilities as they have been given the status of “separated bank” by The RBI.Issuance of Credit cards is not permitted to these banks. Restriction on acceptance of NRI deposits or time deposits. It can’t set up auxiliaries to attempt non-banking monetary exercises.
Benefits of Having Payment Banks
Extension of non-urban banking and monetary incorporation.
Extension of the formal monetary framework.
Effective option in contrast to business banks.
Effectively manages low worth, high volume exchanges.
Admittance to differentiated administrations.
Obstacles down the path
Absence of mindfulness among the majority to get to these administrations.
Absence of motivation for the specialists to include themselves in these exercises.
Absence of framework and admittance to functional assets.
Mechanical obstacles.
Paytm Payments Bank
Customers are offered a facility of a savings bank account with Paytm free of charges and no requirement of keeping a minimum balance. Paytm payments bank has put a capping on maximum balance up to ₹2,00,000 with facilities like:-
Charges not applicable
enjoy online transactions with hassle-free Payments and no charges at all.
Deposit your money with no risk
customers’ money is safe with Paytm Payments bank, and it will never be converted into risky assets.
VISA Debit Card
Get a VISA debit card (virtual) to make online purchases across all the POS and merchants accepting VISA cards. A physical debit card can be ordered by placing a request with Paytm App.
Exciting rate of interest per month
There is a great interest rate of 2.5% per annum paid monthly.
Passbook updates virtually anytime and anywhere.
View passbook transactions and balance and update your passbook immediately.
Safety and security are a priority.
The customer’s account is safe and secure with a Paytm passcode that is non-transferable and unique.
Airtel Payment Bank
Intending to provide a simpler banking process and increase accessibility, Airtel Payments Bank is one of the highly popular Payments banks, similar to Paytm payments bank. Airtel payments bank has made a niche in the digital payment portal arena. In today’s scenario, the banking sector is putting out every chip to create a milestone in the financial system by providing ease of different financial services and keeping this as the main focal point of all efforts.
Conclusion
The bank ought to be completely organised all along. The bank can acknowledge service bills. It can’t shape auxiliaries to embrace non-banking exercises. At first, the stores will be covered at ₹100,000 per client, yet the RBI might very well raise it in light of the exhibition of the bank. Instalment Banks are not allowed to loan to any individual, including their senior members. Bharti Airtel launched its first Payments bank, followed by Paytm payments Bank, jio payments Bank, fino NSDL payments Bank. We hope that candidates understood the concept of Payments bank through this article.
