start payments banks

Reserve Bank of India granted ‘in-principle’ approval to 11 applicants to start payments banks. The Committee of the Central Board (CCB) of RBI has selected 11 entities among the 41 applicant who has the reach and the technological and financial strength to provide service to the customers and promote government’s initiative of financial inclusion across the country. The selected applicants are: Reliance Industries Airtel M Commerce Services Tech Mahindra Vodafone m-pesa Aditya Birla Nuvo Department of Posts Cholamandalam Distribution Services Fino PayTech PayTm National Securities Depository Ltd (NSDL) Sun Pharma. As per RBI notification for Payment Banks: RBI has given ‘in principle’ approval to these 11 applicants to set payment banks is valid for 18 month period. The payments banks will be able to take deposits and remittances, internet banking and other specified services but cannot undertake lending services. Their holding are restricted to a maximum balance of Rs 1 lakh per individual customer. They can issue ATM/debit cards but not credit cards and can also issue other prepaid payment instruments. They can distribute non-risk sharing simple financial products like mutual funds and insurance products. Non resident Indians will not be allowed to open accounts in payment banks. Finance Minister had directed RBI to create a framework for licensing payment banks so as to meet government’s financial inclusion target. It is mandatory for payment banks to hold minimum capital of Rs. 100 crore. FDI of 74 per cent is allowed in payment bank. Selection: The applicants were detailed inspected by an External Advisory Committee (EAC) under the Chairmanship of Dr. Nachiket Mor the Director, Central Board of the Reserve Bank of India.