Profile
Settings
Refer your friends
Sign out
The Reserve Bank of India (RBI) granted in-principle clearance to 11 institutions, including the Department of Posts, to establish a payments bank in India in August 2015. Airtel Payment Bank was the first to open its doors. Other payment banks, such as Paytm Payment Bank, Fino Payments Bank, and Aditya Birla Payments Bank, are now active.
What is a Payment bank?
According to the Reserve Bank of India, the primary goal of a payment bank is to increase financial inclusion. It offers mobile labour workforce, low-income households, small companies, unorganised sector companies, and other users with modest savings accounts, payments, and remittance services.
Difference between a payment bank and a regular bank
A payments bank increases financial inclusion by offering savings accounts and payment services. However, it is not permitted to provide any loan or issue a credit card.
A payments bank has some limitations when it comes to opening a savings account. Customers can start a savings account with contributions of up to 1 lakh, serving as the maximum amount authorised. These banks presently provide interest rates comparable to those given by traditional banks. Payments banks are not permitted to open fixed or recurring deposits under RBI regulation.
List of 6 active Indian payment banks
- Airtel Payment Bank:
The RBI granted the first licence to Airtel Payments Bank. The licence was awarded in 2015, and the bank began operating in September of that year. Bharti Airtel and Kotak Mahindra Bank have collaborated to open this Payment bank (19.9 percent stake). In 2019, Airtel also worked with Bharti AXA General Insurance.
In November 2016, Airtel Payment Bank launched its first payment bank test services in Rajasthan under the tagline ‘Banking Is Now at Your Fingertips India’s First Payment Bank.’ Its headquarters is located in New Delhi.
- Fino Payments Bank:
The Fino Payments Bank established 400+ branches and over 25,000 banking points on the first day. It has been up and running since 4 April 4 2017. Fino Paytech Limited was initially known as Fino Paytech Limited and has been in business as a payment solution since 2006. In 2017, it was revived as a payments bank.
Their tagline is ‘Qadar Aapki Mehnat Ki,’ and Fino Payment Bank’s headquarters is in Mumbai.
- Indian Post Payments Bank (IPPB):
IPPB is a government-owned public sector bank in India. The Ministry of Communications manages it in conjunction with the Department of Posts. The primary goal of the government in establishing this payment bank is to use all of India’s 155,015 post offices as access points. It also plans to offer house-to-house banking services through all 3 lac postmen and Grameen Dak Sewaks. The IPPB was founded on 1 September 2018, and by 4 January 2020, it had over 1.5 crore users in India. However, unlike other payment banks, it works on a lesser scale since it does not provide loans.
This bank’s tagline is ‘Aapka Bank Aapka Dwar,’ and its headquarters are in Delhi.
- Jio Payments Bank:
Jio Payments Bank Limited began operations in November 2016.
The Payments Bank program, according to Reliance, is an exciting chance to have a disruptive influence on India’s financial inclusion environment. This would be accomplished by leading and co-creating an ecosystem to deliver easy, accessible, and inexpensive banking solutions to all, notably the financially excluded, and digitise payments and serve as a clearinghouse.
The Tagline of this Bank is ‘YOUR EVERYDAY BANK For all of your payments, banking, and financial needs,’ and the headquarters of this bank is located in New Delhi.
- Paytm Payments Bank:
The RBI granted Paytm a licence to establish a payments bank in August 2015. Paytm Payments Bank, on the other hand, is a separate organisation in which the founder, Vijay Shekhar Sharma, holds 51 percent of the shares. In November 2017, the payments bank went active. Paytm had planned to create more than 100,000 access points or banking shops by the end of 2018, but it failed to achieve even three figures by 2019.
Paytm, headquartered in Noida, is a well-known Indian e-commerce payment system. Their Tagline is ‘Simplifying Payments for India.’
- NSDL Payments Bank:
One of India’s six operating payment banks is National Securities Depository Limited (NSDL). According to a press statement issued by the RBI, it entered into effect on 29 October 2018. NSDL Payments Bank is a non-governmental organisation classified as a ‘company limited by shares.’ The corporation’s authorised capital, which is located in Mumbai, Maharashtra, exceeds $29 million (200 crores).
Their tagline is ‘Technology Trust and Reach,’ and they are based in Mumbai.
- Aditya Birla Idea Payments Bank (CLOSED):
Idea Payments bank was founded by Aditya Birla Nuvo Limited (51 percent ownership) and Idea Cellular Limited (49 percent stake). In February 2018, the bank commenced operations. However, on 20 July 2019, Aditya Birla Idea Payments Bank announced that it would suspend operations pending regulatory approval.
Conclusion
The Indian economy is rapidly becoming a cashless economy. The country has leapfrogged over Western nations in terms of mobile phone and internet penetration, and today more than half the population is using digital means to manage their finances. This has been made possible with the advent of digital payment systems, which have reduced the dependency on cash and offered many other benefits.
