Reserve Bank of India
released the Guidelines for Licensing of Payment Banks
- provision of savings vehicles.
- supply of credit to small business units
- small and marginal farmers
- micro and small industries
- other unorganized sector entities, through high technology-low cost operations
Eligible promoters for Payment Banks:
- Existing non-bank Prepaid Payment Instrument (PPI) issuers.
- Other entities such as individuals / professionals;
- Non-Banking Finance Companies (NBFCs), corporate Business Correspondents(BCs), mobile telephone companies, super-market chains, companies, real sector cooperatives; that are owned and controlled by residents;and public-sector entities may apply to set up payments banks.
- Promoter/promoter groups should be ‘fit and proper’ with a sound track record of professional experience or of running their businesses for at least a period of five years in order to be eligible to promote payments banks.
Scope of activities:
- Acceptance of demand deposits. Payments bank will initially be restricted to holding a maximum balance of Rs. 100,000 per individual customer.
- Issuance of ATM/debit cards. Payments banks, however, cannot issue credit cards.
- Payments and remittance services through various channels.
- BC of another bank, subject to the Reserve Bank guidelines on BCs.
- Distribution of non-risk sharing simple financial products like mutual fund units and insurance products, etc.
Deployment of Funds under Payments Banks:
- The payments bank cannot undertake lending activities.
- Apart from amounts maintained as CRR with the Reserve Bank on its outside demand and time liabilities, it will be required to invest minimum 75 percent of its “demand deposit balances” in Statutory Liquidity Ratio(SLR) eligible Government securities/treasury bills with maturity up to one year.
- To Hold maximum 25% in current and time/fixed deposits with other scheduled commercial banks for operational purposes and liquidity management.
Capital requirement & Promoter’s Contribution:
- The minimum paid-up equity capital for payments banks shall be Rs. 100 crore.
- Payments bank should have a leverage ratio of not less than 3%, i.e., its outside liabilities should not exceed 33.33 times its net worth (paid-up capital and reserves)
- The promoter’s minimum initial contribution to the paid-up equity capital of such payments bank shall at least be 40% for the first five years from the commencement of its business.
- The foreign shareholding in payments banks would be as per the Foreign Direct Investment (FDI) policy for private sector banks as amended from time to time.
- The operations of the bank should be fully networked and technology driven from the beginning, conforming to generally accepted standards and norms.
- The bank should have a high-powered Customer Grievances Cell to handle customer complaints.
RBI decided to grant In-principle approval to the following 11 applicants to set up payments banks.
- Aditya Birla Nuvo Limited
- Airtel M Commerce Services Limited
- Cholamandalam Distribution Services Limited
- Department of Posts
- Fino Pay Tech Limited
- National Securities Depository Limited
- Reliance Industries Limited
- Shri Dilip Shantilal Shanghvi
- Shri Vijay Shekhar Sharma
- Tech Mahindra Limited
- Vodafone m-pesa Limited
Head Office of Payments Banks:
- Aditya Birla Nuvo Limited-Veraval, Gujarat
- Airtel M Commerce Services Limited-Registered Office-New Delhi, Corporate Office-Gurugram, Haryana
- Cholamandalam Distribution Services Limited-Chennai
- Department of Posts (IPPB)-New Delhi
- Fino Pay Tech Limited-Navi Mumbai
- National Securities Depository Limited-Mumbai
- Reliance Industries-Mumbai
- Vodafone m-pesa Limited-Mumbai
First PB Logo :
Note: India’s first Payments Bank is Airtel Payments Bank that started its services in Rajasthan.