PAYMENTS
BANK
Group- 1
Kirtan Singi- 187128
Vedant Mathur- 187159
Yashvi Fadia- 187166
Yugam Bharadwaj- 187167
Shiwank Ashutosh- 187168
2
Payments banks are like
any other bank, but
operating on a smaller
scale without involving
any credit risk.
Payments bank provide
3
the services that
include-
⊸ Acceptance of deposits to a maximum of rupees
1 lakh only
⊸ Savings bank or a current account
⊸ Payment of interests just like normal banks
⊸ Issue of debit cards/ATM cards to its customer
⊸ Mobile Banking
⊸ Internet Banking Services
⊸ Provides Basic Financial services
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Need for Payments Bank
Digital, Paperless Catering the
Financial
and cashless unbanked and
inclusion
banking under banked
Technology
driven transaction Access to large
which are no. of people
traceable
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How do payments bank earn
profit?
⊸ Depositing money in
securities and commercial
banks offering high interest
rate to what it offers.
⊸ Transaction costs
⊸ Cross selling and bank
correspondents
⊸ POS and MDR
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History of Payments Banks
7 Jan 2014- 17 July 2014- RBI
23 Sept 2013-
Recomendation by released draft 27 November – Final
Nachiket Mor
Nachiket Mor guidelines for Guidelines by RBI
Commitee
Comittee interested parties
19 August 2015-
Feb 2015-
License to 11 entities 28 Feb 2015- India
to launch payments post payments bank Applications for
banks payments bank
in budget
license
(now only 7)
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Advantages
More Competition for Traditional
Banks
Achieve Financial Inclusion Objective
Encourage digital payments
Reduce SLR burden on Commercial
Banks
Check on Black Money
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IMPACT ON INDIAN BANKING
SYSTEM
Competition Players from Attract retail and
different industries business customers
Financial Inclusion Ability to change
face of rural India
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Difference between Traditional
and Payments Banks
Feature Traditional Bank Payments Bank
Making Deposits
Interest on deposits
Withdrawal Facility
Availing of loans
Credit Cards
Buying investment
options
Deposit limit No limit Rs. 1 Lakh
Less deposit amount and no credit- Payments bank
Otherwise for larger deposits – Commercial banks
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Examples of Payments Bank
AIRTEL PAYMENTS BANK
• Public Limited Company
• First live payments bank in country
• Joint venture between Bharti Airtel and
Kotak Mahindra bank.
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Paytm Payments Bank
• Officially innaugrated in November
2017
• 51% share by Vijay Shekar Sharma,
39% share One97 Communications,
and 10% by a subsidiary of one97
communications.
• MD and CEO- Satish Kumar Gupta
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Jio Payments Bank
Jio Payments Bank is an Indian payments
bank that started operating in 2018.
Jio Payments Bank Limited is a joint
venture between the Reliance
Industries and the State Bank of
India with the stake of 70:30.
Jio Payments Bank is the sixth payment
bank to commence operations in India
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Scams/Frauds Related to
Payments Bank
The remote access mobile application scam
Trap for gullible insurance seekers
Phishing messages promising tax return
KYC update hoax
Simpleto crack passwords
Fake UPI payment links
Fraudulent NPCI/UPI/BHIM handles and portals
Lack of awareness of UPI pay options
• Not Permitted to lend
• Investment- 2-4% net cost of funds
No lending
• Net return only 1%
operations
• Invests 75% of balances in SLR eligible
government bonds or T-bills
treasury
• 25% deposits with other commercial banks Restricts
model
• Relies on low ticket account balances Payments only
banks
Challenges faced by payments
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Suggestions
⊸ RBI’s vision 2021 is focussed
upon exceptional payment
experience and cash-lite
society. This hints towards a
huge untapped market for
payment banks.
⊸ Micro- credit , the
differentiating factor
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Conclusion
⊸ These are useful in the
digital age.
⊸ Provides basic facilities
through mobile phone
⊸ A lot yet to be done to reach
the masses and to reach the
goal of financial inclusion.
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Any Questions?
