Payment Banks in India with their Headquarters
List of Payment Banks In India with their Headquarters, Taglines, and name of Chairman. Payment Banks with its Headquarters (HQ). Payment Banks In India PDF. Payment Banks List. If you are preparing for IBPS PO/Clerk, SBI PO/Clerk, RBI, NABARD, and Bank PO & Insurance exam, you will come across a section on Banking and Finance Awareness Section. Here we are providing you the Important Information about Payment Banks In India along with their Headquarters and their MD & CEOs.
The Payments Bank in India is registered as a public limited company under the Companies Act, 2013. These Payment Banks in India are licensed with certain conditions under Section 22 of the Banking Regulation Act, of 1949. The conditions include the acceptance of demand deposits and the provision of payments and remittance services. Payments Banks in India are governed by the provisions of the Banking Regulation Act, 1949; Reserve Bank of India Act, 1934; Foreign Exchange Management Act, 1999; Payment and Settlement Systems Act, 2007; Deposit Insurance and Credit Guarantee Corporation Act, 1961. The Payments Bank receives scheduled bank status when they commence their operations.
What is a Payment Bank? A payments bank is like any other bank but operates on a smaller scale without involving any credit risk. In simple words, it can carry out most banking operations but can’t advance loans or issue credit cards. It can accept demand deposits (up to Rs 1 lakh), and offer remittance services, mobile payments/transfers/purchases, and other banking services like ATM/debit cards, net banking, and third-party fund transfers.
List of Payment Banks in India
A payments bank is a new category of banks conceptualized by the Reserve Bank of India, which operates at a smaller scale than an actual bank and doesn’t involve any credit risk. It can carry out most banking operations but can’t advance loans or issue credit cards. These banks operate digitally (on mobile phones and other devices using the internet) rather than through physical branches.
- Payments Banks it’s an original model of banks conceptualized by the Reserve Bank of India (RBI). These banks can accept a restricted deposit, which is currently limited to ₹1 lakh per customer & may be increased further. These banks cannot issue loans & credit cards.
- Payment bank can accept deposits restricted to ₹ 1 lakh per customer, & are allowed to pay customers interest on the money that is being deposited. They can be used for either current accounts or savings accounts. The payment banks ATM or debit cards will also work on all banks’ machines.
- Payment banks propose enhanced services compared to a digital wallet but are not in the same league as the traditional banks.
- Payment Banks are smaller versions of the traditional banks. Their objective is to reach low-income households & small businesses mainly through mobile phones rather than traditional offices. It is an initiative by the government to increase financial services penetration level to remote areas of India. Payment Banks can carry out most of the banking operations except issuing credit cards & loan advances. The Reserve Bank of India (RBI) licensed eleven entities to launch payment banks.
Key features of the Payments Bank
- Payments Bank accepts demand deposits.
- 25% of branches must be in unbanked rural areas.
- Payments Banks will initially restrict to hold a maximum balance of INR 100,000 per individual customer.
- Payment Banks issue ATM and Debit cards but cannot issue Credit cards.
- Payments Bank offers savings accounts, current accounts, and mobile banking services.
- Payments Banks can choose to become a BC of another bank, subject to the RBI guidelines on Business Correspondents (BCs).
- Payments Banks offer payments and remittance services through various channels.
- Payments Banks distribute non-risk sharing simple financial products like mutual fund units and insurance products, etc.
- Payment banks are required to maintain a minimum capital adequacy ratio of 15 percent of their risk-weighted assets (RWA) continuously. Capital of Tier I should be at least 7.5 percent of RWAs. Capital of Tier II should be limited to a maximum of 100 percent of total Tier I capital.
- The outside liabilities of a payments bank should not exceed 33.33 times its paid-up capital and reserves.
- The promoter shall contribute at least 40 percent of the paid-up equity capital for the first five years from the date of commencement of the business.
How are they different from traditional banks?
Interest rates: While the standard interest rate for commercial bank lies between 3.5 and 6 percent, Airtel payments banks offer the highest interest rate of 7.25%. Paytm Payments bank offers an interest rate of 4 percent on a savings account and 7 percent on fixed deposits. Payments banks can accept deposits of up to Rs 100,000 per account from individuals and small businesses.
- Zero balance account: Unlike most commercial banks which levy charges if customers fail to hold a minimum balance in their account, payment banks offer zero balance accounts or no minimum balance accounts without any extra charge.
Why an option for payment banks?
The main objective of payments banks is to promote financial inclusion by giving services like small savings accounts, and payment or remittance services to migrant labor workforce, low-income households, small businesses, and unorganized sector entities, as well as other users. Therefore, the primary objectives of Payment Banks in India are as follows,
- Payments Bank will improve financial inclusion by providing small savings accounts, and payments/remittance services to the migrant labor workforce, low income households, small businesses, and other unorganized sector entities.
- This is made by enabling high volume and low value transactions in deposits and payments or remittance services with a secured technology.
Services offered by the Payment Bank
- Bill payment
- Recharge
- Wage payment
- Insurance premium payment
- Domestic and international remittances, etc.
List of Payment Banks in India with its Headquarters (HQ)
| Name of the bank | Headquarters | Head Persons (MD&CEO) | Tagline |
| Airtel Payments Bank Limited | New Delhi, India | Anubrata Biswas,MD &CEO | Banking Is Now At Your Fingertips India’s First Payment Bank |
| Fino Payments Bank Limited | Mumbai ,Maharashtra | Rishi Gupta,MD &CEO | Qadar Aapki Mehnat Ki |
| Jio Payments Bank | Mumbai ,Maharashtra | Mr. Vinod Easwaran | |
| India Post Payments Bank Limited | New Delhi, India | J Venkatramu,MD &CEO | Aapka Bank Aapke Dwar |
| Paytm Payments Bank Limited | Noida,U.P | Surinder Chawla, MD and CEO | Simplifying Payments For India |
| NSDL Payments Bank | Mumbai ,Maharashtra | Abhijit Kamalapurkar | Technology Trust and Reach |
History of Payment Banks
Reserve Bank of India (RBI), on 23rd September 2013 constituted a Committee on Comprehensive Financial Services for Small Businesses and Low Income Households that was headed by Nachiket Mor. The committee submitted it’s report on 7th January 2014 and also recommended the formation of a new category of bank (Payment Banks) among its other recommendations.
- Draft guidelines for payment banks, seeking the opinion of interested entities as well as general public was released by RBI on 17th July 2014. Final guidelines for Payment banks were released by RBI on 27th november 2014.
- 41 applicants applied for the licence of Payment Bank and their list was released by RBI in February 2015. The licence applications were evaluated by External advisory Committee (EAC), headed by Nachiket Mor, which submitted it’s report on 6th July 2015 after examining the financial track record as well as governance issues of the applicant entities.
- On 19th august 2015, RBI gave in-principle licenses to 11 entities to launch Payment Bank. The In-Principle license is valid for 18 months and the concerned entities are required to fulfill the requirements within this period. They cannot engage in Banking activities in this period. Upon satisfactory fulfillment of the conditions required to set up a Payment Bank, RBI will grant full licenses under Section 22 of the Banking Regulation act, 1949.
Difference between Small Finance Bank and payment Banks
Below, we have mentioned the Difference Between a Small Finance Bank and a Payment Bank based on parameters, objectives, scope, restrictions, etc. It will give a clear picture of the things that set apart Small Finance Bank Payment Bank.
| Parameters | Small Finance Banks | Payments Bank |
| Definition | Small Finance Banks are financial institutions that want to use routine banking operations to meet the financial requirements of underprivileged groups. | A payments bank functions similarly to other banks but on a smaller scale and without taking on any credit risk. It can do the majority of banking tasks, but it cannot grant credit or advance loans. |
| Objectives | By providing credit to small business units, small and marginal farmers, micro and small industries, and other unorganized sector entities, these have been established to promote financial inclusion. | By offering modest savings accounts and payment/remittance services to migrant laborers, low-income households, small enterprises, and other unorganized sector entities, payments banks’ main goal will be to promote financial inclusion. |
| Minimum Capital Required | Small finance banks are required to have a minimum paid-up equity capital of Rs. 100 crore. | The payments bank’s minimum paid-up equity capital is Rs. 100 crore. |
| Scope | Merely begin all primary banking operations in the underserved area. | Credit cards cannot be issued, however, ATM/debit cards can; mobile banking is available. |
| Time Deposit | Both fixed deposit (FD) and recurring deposit (RD) time deposits are accepted. | These do not accept time deposits like FD and RD. |
| Loans | They can offer small loans | They cannot offer loans |
| Restrictions | There are no limitations on how tiny financial banks can operate. | The payments bank is not permitted to establish subsidiaries to engage in non-banking financial services. |
| First Launched | India’s first small finance bank, Capital Small Finance Bank, debuted in 2016. | The RBI granted a payments bank license to Airtel Payments Bank in 2016, making it the country’s first organization to do so. |
| Number of banks | As recorded in December 2023, there are 12 small finance banks in India. | As recorded in December 2023, there are 6 payment banks in India. |
Payment Banks & Small Finance Bank- Download Complete Notes PDF
Payment Banks – Important Regulations
- The Payments Bank is proposed to be registered as a public limited company under the Companies Act of 2013, and licensed under Section 22 of the Banking Regulation Act of 1949.
- It will be governed by the provisions of the Banking Regulation Act of 1949, the Reserve Bank of India Act of 1934, the Foreign Exchange Management Act of 1999, the Payment and Settlement Systems Act of 2007.
- They must keep a Cash Reserve Ratio (CRR).
- A minimum of 75% of its “demand deposit balances” must be invested in Statutory Liquidity Ratio (SLR) eligible Government securities/treasury bills with maturities of up to one year.
- For operational and liquidity management purposes, a maximum of 25% in current and time/fixed deposits needs to be heldwith other scheduled commercial banks.
- A payments bank must have a minimum paid-up capital of Rs 100 crore.
- For the first five years after the company’s inception, the minimum initial contribution to paid-up equity capital must be at least 40%.
Payment Banks – Limitations
- Payments banks have a no-lending business model – they can’t lend money from their deposits, so they can’t earn high interest on a user’s borrowed capital.
- Credit as a product does not exist for PBs, putting them at a significant disadvantage when compared to commercial banks.
- Payments banks are also facing fierce competition from unexpected sources such as Unified Payments Interface (UPI).
- UPI quickly became the star of digital transactions due to its seamless interoperability, stringent security, and massive cash backs from third-party payments apps on the platform.
- In contrast to payment banks, the UPI app (third party) has a simple interface that is not governed by banking regulations. It is a one-tap solution that a user can use without the need for KYC.
- There is a general lack of awareness among the general public about how to access these services.
- Incentives for agents to participate in these activities are lacking.
- Inadequate infrastructure and operational resources.
- Various technology-related obstacles.
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