What are payments bank?
– conceptualised by RBI.
– Payments bank can only deposit money which is restricted to 1 Lac per customer.
– They cannot issue credit card or give loans.
A/c types: Saving A/c or Current A/c
(Note: Current A/c are best suited for people who have to make many transactions. There is a limit to free-transactions on saving accounts per month. But there is no such limit in Current Account. The Current A/c holders do not earn any interest for keeping their amount in bank. It is most suited for businessmen.)
How Payment Banks will improve financial inclusion?
One of the mandatory compliance for Payments bank is that 25% of the branches have to be opened in rural unbanked areas.
Payments bank are especially for providing financial services to small businesses & low-income households.
It will help in bringing more rural & urban people into banking system. Hence, will lead to more financial inclusion.
P.S. 1. Airtel has become the first to launch a Payments bank in India as a pilot project in Rajasthan.
P. S. 2. Just like other banks, payments bank will be regulated by RBI.
P.S.3. Payments bank will offer usual bank services like mobile banking, Internet banking, ATMs, etc.
P.S.4. They can also provide products like insurance, pensions, mutual funds, etc.
With Great Love,
Er. Amit Yadav