Reserve Bank of India on August 19 ‘in-principle’ cleared 11 applicants to start payments banks. This in-principle approval will be valid for a period of 18 months. In this time period these entities has to fulfill all the requirements and other conditions mentioned under the guidelines of RBI.
Total 41 entities had applied to get the approval in which Committee of the Central Board (CCB) of RBI has selected 11 entities with experience in different sectors with different capabilities that can provide service to the customers and promote government’s initiative of financial inclusion.
The selected applicants are:
- Reliance Industries
- Airtel M Commerce Services
- Aditya Birla Nuvo
- Tech Mahindra
- Vodafone M-pesa
- Department of Posts
- Cholamandalam Distribution Services
- Fino PayTech
- National Securities Depository Ltd (NSDL)
- Sun Pharma Promoter Dilip Shantial Shanghvi
- Paytm founder Vijay Shekhar Sharma.
What Payment banks can and cannot do?
- RBI norms has restricted Payments bank to hold a maximum balance of Rs. 1,00,000 per individual customer
- They cannot lend money to customers but can accept term deposits.
- The deposits raised by them will have to be invested in govt bonds and a maximum 25% can be invested in an account with another bank
- These banks can only issue ATM/debit cards. They cannot issue credit cards.
- They can enable Payments and remittance through various channels.
- Business Correspondents (BC) of another commercial bank, subject to the RBI guidelines on BCs.
- They can distribute non-risk sharing financial products like mutual fund units, insurance products etc.