Breaking news – India Issues Highly Awaited Payments Bank Licenses To 11 Players

RBI has granted in-principle approval to 11 applicants Payments bank license.

The following companies have received Payments bank license:

The guidelines for the Payments bank license were drafted by RBI on November 27, 2014. The objective behind a payments bank is to drive financial inclusion in the country by setting up small saving accounts. These banks will be set up primarily for payments and remittances to the migrant labor workforce, low income households, small businesses and entities in other unorganized sectors. The Reserve Bank received 41 applications for payments banks.

In terms of what a payments bank can actually do, the following are some key aspects:

  • Accept deposits from individual customers with a maximum limit of Rs. 1 lakh.
  • Issue debit and ATM cards for transactions but not credit cards.
  • A payments bank cannot undertake any lending activity.
  • Allow transactions through Internet and leverage technology to offer low cost banking solutions.

Selection has been done after detailed scrutiny by an External Advisory Committee (EAC) under the chairmanship of Dr Nachiket Mor, director, Central Board of the Reserve Bank of India.

RBI will be using the learning from the licensing round and will revise the guidelines if required.

The in-principle approval granted by RBI is valid for a period of 18 months. During this time the applicants have to comply with the requirements under the Guidelines and fulfil the conditions as set by the Reserve Bank of India.