InvestorQ : What is the scope for payment banks operating in India?
Manisha Mehta made post

What is the scope for payment banks operating in India?

Answer
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Suresh Patil answered.
1 year ago


Payment banks are a new model of banks that have started operating in India. These banks differ from conventional banks as they cannot lend to their customers. They can, however, provide simple financial products, take deposits, allow remittances, etc.

The scope of activities enjoyed by payment banks in India are:

- Acceptance of demand deposits Payments bank will initially be restricted to holding a maximum balance of Rs. 100,000 per individual customer.

- Issuance of ATM/debit cards Payments banks, however, cannot issue credit cards.

- Payments and remittance services through various channels.

- Business Correspondents (BC) of another bank, subject to the Reserve Bank guidelines on BCs.

- Distribution of non-risk sharing simple financial products like mutual fund units and insurance products, etc. The one function payment banks cannot undertake is lending activities.