Tag: Airtel Payment Bank

Payment Banks in India

Payment Banks in India




Payment Banks

A Payment bank is similar to any other bank but it operate on a smaller scale.The main purpose of payment bank is to provide financial services to everyone particularly remote areas of country, small businesses and low incomes households.. Payment banks must have at least 25% of its branches in unbanked rural areas. In August 2015, Reserve Bank of India(RBI) granted ‘in-principle’ approval to 11 payment banks out of which some entities backed out. All banks need to be technology driven and fully networked from day one.

Payment bank can do most of the banking operations but cannot issue loans and credit card. Payment banks can provide services like ATM cards, debit card , net-banking and mobile banking and third party fund transfer facilities.  These banks can accept deposits of upto 1 lakh per customer but this limit may be increased later.

So far Airtel Payment Bank and India-post Payment Bank have commenced their operations. By 2018 4-5 payment banks are expected to be operational. Payment banks are expected to introduce formal banking to people even in remote parts of country and those who have done mainly cash transcriptions. Workers and migrant labour can shift to payment bank to send money through mobile phones.

Payments banks have to invest 75% of their deposit in government securities with maturity upto one year. It can hold maximum 25% in fixed deposits of other scheduled commercial banks.

Airtel Payment Bank

Airtel Payment Bank

Airtel payment bank became India’s first payment bank to start operation in November 2016. Currently it is providing 7.25% rate of interest on saving account. The rate of interest can be changes later. Airtel mobile number can be used as account number. There is some fee for fund withdrawal and fund transfer. Airtel charges 0.65% on withdrawal amount more than Rs. 4000 and it charges Rs. 5-25 for withdrawal less than Rs. 4000.

India Post Payment Bank

India Post Payment Bank

India Post Payment Bank became second payment bank to start operation in India. It started its operation in January 2017 in Raipur and Ranchi. It is providing doorstep banking with charging a nominal fee. The bank is offering 4.5% to 5.5% interest on saving account deposits. There are no charges on cash withdrawal. Currently India Post has a network of 155,000 offices in the country. India Post Payment bank plans to open 650 branches in the first phase by end of September 2017.

There are no charges for fund transfer from one payment bank to another payment bank through internet or USSD.