1. Payments Banks are required to have a minimum paid-up equity capital of INR 100 crore.
Example: ‘Fino Pay Tech Limited’ that is backed by World bank’s IFC and Blackstone acquired Nokia Money in 2012 to launch ‘Alpha Payment Services’ with an initial paid-up equity capital of INR 300 crore.
2. They shall leverage at a ratio of at least 3%. This means that its external liabilities shall not exceed 33.33 times the net worth regarding the paid-up capital and the reserves.
3. The minimum initial contribution of the promoter to the paid-up equity capital should at least be 40% for the first five years from the commencement of the business.
Example: In 2011, Airtel partnered with SBI to form a joint venture for making mobile payments. However, it went unsuccessful. Again, after more than five years, it partnered with Kotak Mahindra Bank to obtain a license with the Payments Bank. Kotak Mahindra Bank is expected to take a 19.9% stake in this joint venture.
4. The Foreign Direct Investment for private banks is notified timely. At present, the permissible limit is 74%.