All About Payments Bank in India: Meaning, Interest Rates 2018, List of Banks
All About Payments Bank in India: Searching for the meaning of payments bank in India? If you are not aware about what is Payments bank, then you are at the right place.
In this article I will be sharing all about payment banks, how they work, payment banks vs small banks like SBI, ICICI bank, HDFC etc, interest rates, minimum balance etc.
Just give you a heads up before proceeding further, so far couple of payments bank started their operations in India and among them few of the popular payments banks are PayTm, Airtel, India Post etc.
What is Payments Bank?
A Payments bank as the term says is a bank which is only deal with various types of payments. It is like a normal savings account only, but are certain limitations. With the involvement of RBI, these banks accept up to Rs 1 lakh only and can’t issue credit card or loans to its customers.
The major highlight of such banks is that they operate mostly on online mode through mobile phone app or internet. They don’t need a branch to support their services like we have seen for all typical banks.
As this is a new concept of banking in our country so there are much excitement among people to know more about payment banks. I will be covering few of the common questions like how many payments bank are operating in India, What are the services being offered by payment banks in India ? What are the Interest rates being offered by payment banks and many more.
List of Payments Banks in India 2018
Do you know how many payment banks in India are operating currently? So far many financial institutions has applied for payments bank approval, looking at the huge potential and scope of digitisation, online payments in India. Here is the approved payment banks list in India.
- Aditya Birla Idea Payments Bank
- Reliance Jio payment bank
- Airtel Payments Bank
- PayTm Payments Bank
- India Post Payments Bank
- Fino PayTech Payments Bank
- NSDL payments bank (National Securities Depository Limited)
- Vodafone M-Pesa payments bank
Source : RBI website
All About Payments Bank – Things You Should Know
Here I tried to list out few basic information which you must know first about their operations and business model.
How does a payment bank work?
The main purpose of payments banks are providing hassle free way to execute payments for a customer. Mostly people love to shop online and pay through various payment options. Now with payments bank account, one can easily pay their online shopping bills, recharge mobile phones, pay DTH bill and any kind of online payment without any trouble.
On top of that one can earn good interest rates as well. Although you can do various other services like fund transfer, ATM withdrawal etc like a typical banks. But the main purpose is to make mobile payments popular as majority of Indian population is residing in villages where internet is spreading gradually.
So, this concept of Payments bank will definitely boost the mobile payment, a huge boost for the digital India initiative taken by Govt of India.
Payment banks vs small banks
Yes, there are certain differences from operation point of view between these 2 types of accounts. I wrote a detailed article on the difference between payment bank and commercial bank. Hope this will surely clear all your doubts.
The basic difference is that Payments bank can have maximum 1 lakh balance and this is a zero balance account. While a normal bank savings account have minimum balance criteria and one can any amount. You will not get any credit card or loan or insurance or fixed deposit against your Payments bank account.
How does a payment bank make money?
It is a obvious questions as per the rules of Payments bank, they can’t offer any kind of loan, credit cards through most of the banks in India make money. In that case, these kind of banks need to depend highly on various transactional charges like fund transfer, withdrawing money etc.
Most of the payments bank also partnered with some banks who can sell various products and services. So they can refer customers to those banks and make money from commission model.
Like commercial banks, as Payments bank also encourage digital payment through transactions using point of sale terminals and resultant MDR (merchant discount rate). So they also make money from such vendors as per their agreements & commission accepted.
FAQs Related To Payments Bank in India
What are the basic services offered by Payment banks
Payments banks are mostly good for various payment related transactions online or offline. In that regard after opening a payments bank savings account you will get basic banking services like Debit Cards, Online Banking, Mobile Banking, and also accept deposits of upto Rs. 1 lakh per customer in a Savings Account.
What are the charges on transactions?
This is again depending up on the banks and their terms. E.g. you can checkout the Paytm payments bank charges where you can see that in case online transfer there is no charges, but for withdrawal there are certain charges.
Which Payments bank offer highest Interest rates
Again it will depend up on individual banks and their terms. E.g. Paytm payments bank is offering a 4% interest rate per year, but Airtel Payments bank is offering a 7.25% interest rate which is highest interest in any savings account in India.
What is the KYC process of Payments bank?
To complete the KYC process you have to provide Aadhaar number and PAN and I am sure with almost every Payments bank, you can do the same using their mobile itself.
Can I open more than one Savings Account?
No, only one Savings Account can be opened for one customer.
Can I get a cheque book & issue Demand draft?
Generally you should apply for a cheque book by paying some nominal fees. But again these things will depend up on your banks terms & conditions and facilities they cover under Payments bank savings account.
Can I add nominee in Payments bank
Yes, you should get this facility to add or change nominee.
Can I get ATM Debit card to withdraw money
Mostly every Payments bank has their own digital debit card facility which can be used for online purchase, payment related transactions. Recently Paytm has launched a Rupay Debit card so that their customers can use the same and withdraw money from anywhere in India.
Can payment bank issued Cheque Book?
Yes, you can get a cheque book. But you have to pay a nominal charges as per the banks terms & conditions.
Can payment banks accept time deposits?
Directly Payments bank doesn’t offer anny FD or Fixed deposit facility. But every payment bank is tied up with a normal bank. So, if you wish to open a FD account with Payment bank, then they will do the same with their partnered bank.
Can payment banks give loans?
No, as per the rules of Payments bank they can’t offer any kind of loan like home loan, personal loan, car loan etc. May be they can transfer your request to their partnered bank.
Payments Bank in India – Conclusion
So, it is clear that the purpose of payment banks are to make online payment more flexible and give people easy option for hassle free payments. This will surely give a thumbs up to Digital India mission, started by Govt of India.
Keep a track of this article for more updates related to Payments bank in India. I am going to update this article with all possible queries and information to make it useful. In case you have more information or you want me to corent any of them, please write a comment below and share your knowledge as well.