InvestorQ : What’s the difference between the functioning of a payment bank and a commercial public/private sector bank?
Anjali Desai made post

What’s the difference between the functioning of a payment bank and a commercial public/private sector bank?

Answer
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seema Upadhyaya answered.
1 year ago


Payment banks is a new model of banks operating in India under the ambit of Reserve Bank of India (RBI). The RBI’s objective was to further its goal of financial inclusion.

However, there are a number of functions a payment bank cannot perform, unlike normal private/public sectors banks:

- A payments bank is not allowed to give any form of loan

- A payments bank cannot issue an credit card too, as a credit card is a form of unsecured personal loan.

- Customers can open a savings account with deposits of only up to Rs 1 lakh, which is also the maximum balance allowed.

- Payments banks can’t accept fixed or recurring deposits.