5 smart things to know about payment banks

Posted by: Labdhi Mehta on Apr 10, 2017, 06.30 AM IST

1. Payments banks were introduced by the RBI to widen financial inclusion to small savings account holders, low-income households, unorganised sector, migrant workers and small businesses.

2. NBFCs, corporate business correspondents, mobile phone firms, supermarket chains, public sector entities and others can set up payment banks meeting the minimum capital requirement of Rs 100 crore.

3. Payment banks restrict activities to acceptance of demand deposits, remittance services, Internet banking and other specified services but cannot undertake lending services.

4. A payment bank can accept only savings and current deposits of up to Rs 1 lakh per customer. They can issue ATM/debit cards but not credit cards.

5. They can distribute non-risk sharing simple financial products like mutual funds and insurance products.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.) This article appeared in Economic Times dated Apr 10, 2017, 06.30 AM IST