FM GROUP ASSINGMENT
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PAYMENTS BANK
GROUP-11
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INTRODUCTION TO PAYMENT BANKS
• Conceptualised by RBI n 2013.
• A one stop solution for day to
day transactions and easy
money transfer.
• To increase financial inclusion of
small businesses, low income
households and migrant work
force
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GUIDELINES PROVIDED BY RBI, 2013.
• Minimum Capital required is 100 Crores INR
• Other entities except promoters cannot hold more than 10% i
n these banks.
• Any acquisition of more than 5% will need approval from RBI
• These banks must be fully networked and technology driven f
rom the time of its commencement.
• 25% of its branches must be in the unbanked rural areas.
• High powered grievance cell to support customers.
KEY FEATURES-PROS
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•Comfortable rate of Interest On deposits
•Promote paperless banking, no issuance of DD and Cheques.
•Issuance of debit cards.
•Facility to sell thirds party mutual funds, insurance and pension pr
oducts.
•Most of these banking points will operate well beyond normal banking hours.
•EasyBilll Payments
•Sell Government Schemes.
•The banks are required to invest 75% of the deposits in Gsec and Tre
asury Bills.
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KEY FEATURES-CONS
• Cannot facilitate loans
• Cannot issue credit cards
• Cannot accept NRI deposits
• Cannot setup subsidiaries for non-banking financ
ial services.
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AIRTEL PAYMENT BANK
• AMSL (AIRTEL M-COMMERCE SERVICES
LIMITED) was granted the license
of payment bank in April 2016 an
d is the first payment bank to g
o live in India
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KEY FEATURES
• Quick and Paperless account opening using Aadhar based e-KYC
• Personal airtel mobile number will your bank account numbers
• Interest rate of 7.25% on deposits on savings account, highest in Indi
a.
• Personal accidental Insurance of Rs 1 Lac with every saving account
• A min of talktime free for every 1 rupee deposited.
• It has introduced payment panks across 10,000 Airtel retail outlets in
Rajasthan.
INDIAN POST PAYEMENT BA
NK
Indian post payement bank
India Post Payments Bank (IPPB) is a 100% government
owned payments bank operating under the Department of
Posts, Ministry of Communications, which aims to utilize all of
India's 155,015 post offices as access points and 3 lakh postal
postmen and Grameen Dak Sewaks to provide house to house
banking services.
The first phase of the bank with 650 branches and 3250 post
offices as access points was inaugurated on 1 September 2018
IIPPB would be like any other bank but it will operate at a smaller
scale without involving any credit risks and can't issue advance
loans or issue credit cards
SERVICES
• India Post Payments Banks offers savings accounts, money
transfer and insurances through the third parties, bill and utility
payments. The Bank will reach to rural and far-flung areas of the
country, delivering banking services to the doorstep of every
Indianaccount: The bank offers savings and current accounts up
to a balance of Rs 1 Lac.
• QR Card: Customers can use QR code payments eliminating the
need to remember account numbers, PINs and passwords.
• Unified Payments Interface
• Immediate Payment Service
• National Electronic Funds Transfer
• Direct Benefit Transfer
NATIONAL SECURITIES
DEPOSITORY LIMITED
NATIONAL SECURITIES DEPOSITORY LIMITED
National Securities Depository Limited (NSDL) is an
organization which functions as the mediator of
brokers and investors.
Axis Bank, Citibank, HDFC Bank, Dena Bank,
Canara Bank are some of the authorized banks for
NSDL.
INTRODUCTION
Founded as of 8th November 1996, the National
Securities Depository Limited (NSDL) is India’s largest
central securities depository.
It is based in Mumbai and was the brainchild of a
national economic group that was focused on building a
robust system to handle securities that are used in its
dematerialized format in the Indian market.
This was essential to tackle the century old practice of
paper based trade settlements that had since turned
cumbersome and a liability, thanks to issues such as bad
delivery.
To resolve above stated problem NSDL was established.
NSDL AS A PAYMENT BANK
NSDL Payments Bank Limited has commenced operations
as a payments bank with effect from October 29, 2018.
The Reserve Bank has issued a license to the bank under
Section 22 (1) of the Banking Regulation Act, 1949, to
carry on the business of payments bank in India.
NSDL plans to use its 26,765 DP service centers spread
across 1,632 cities/towns to open bank accounts.
IDBI bank has approached NSDL to buy stake in NSDL’S
payment bank business.
IDBI Bank is the one of the promoter of the NSDL and
holds 30% stake in NSDL.
ADITYA BIRLA PAYMENT BANK
HISTORY
Aditya Birla Nuvo (now Grasim Industries Limited) was one of the
11 entities to receive an in-principle approval by Reserve Bank
of India (RBI) to set-up payments banks in India, in August 2015.
Post the in-principle approval, RBI had issued a license to Aditya
Birla Payments Bank under Section 22 (1) of the Banking
Regulation Act, 1949 to commence with the business of
payments bank in April 2017.
Aditya Birla Payments Bank earlier operated as IMCSL (Idea
Mobile Commerce Services Ltd) as a brand of Idea Cellular Ltd.
Aditya Birla Payments Bank Limited (ABPB) is a payments
bank started as a joint venture by Aditya Birla Nuvo Ltd. and
Idea Cellular.
launched on February 22, 2018, it is the fourth payments
bank to begin operations since issuance of licenses to 11
firms by the Reserve Bank of India in August 2015.
Payments Banks are a special category of banks that can
accept deposits of up to 1 lakh but cannot give loans or credit
cards.
Aditya birla Nuvo Ltd. Having 51% share and ldea cellular
have 49% share.
JIO PAYMENTS BANK
• Jio Payments Bank is an Indian payments bank that started operating in 201
8.
• It is a 70:30 joint venture between Reliance Industries and the State Bank of India. Ji
o Payments Bank will be competing against more established players like the two-ye
ar-old Airtel Payments Bank and Paytm founder Vijay Shekhar Sharma-promoted Pa
ytm Payments Bank.
• Some of the mutually beneficial outcomes of this association between SBI and RIL ar
e: the much advertised YONO platform of SBI has been already integrated with Relia
nce Jio with the My Jio app, Jio Prime, the customer loyalty programme offered by J
io will be offered to the SBI customers too and so on.
WHY FIVE OUT OF THE 11 PAYMENT
S BANKS HAVE SHUT SHOP
• Vodafone’s m-pesa and Aditya Birla Payments Bank have shut operatio
ns.
• India post Payments Bank is also looking to convert to Small finance
bank (SFB).
• From a net loss of ₹242 crore in FY17, losses climbed to ₹516 crore
in FY18. High operating expenses and weak revenues led to the losses
.
• As per the RBI guidelines, payments banks are allowed to take deposi
ts only up to ₹1 lakh per account. They also need to invest 75 per c
ent of their deposits in government securities with maturity up to o
ne year and the balance 25 per cent can be parked with commercial ba
nks.
• To compete with traditional banks, payments banks will have to offer at
tractive interest rates on deposits. Most private banks offer 3.5 per c
ent for their low-value savings deposits .
• About three years ago, Airtel Payments set the rate on its savings depo
sits at 7.25 per cent. This had meant the bank incurring a loss on each
deposit, which it could not absorb for long. The interest rate the bank
offers now is 4 per cent.
• Paytm Payments Bank also offers 4 per cent.
• Fino Payments has tied up with Suryoday Small Finance Bank, offering a
sweep facility. The excess over ₹1 lakh deposit is transferred into Su
ryoday account. Here, Fino Payments also offers a higher rate on deposi
ts, 6.25 per cent up to ₹1 lakh and 7.25 per cent above that.
• Coming up with such innovative offers and tie-ups can help these banks.
