Payments banks is a new model of banks conceptualized by the
Reserve Bank of India (RBI) with the objective of achieving financial inclusion
and increased access to financial services. A payments bank is like any other
bank, but operating on a smaller scale without involving any credit risk. It
can carry out most banking operations but can't advance loans or issue
credit cards. It can accept demand deposits (up to Rs.1 lakh), offer
remittance services, mobile payments/transfers/purchases and other banking
services like ATM/debit cards, net banking and third party fund transfers.
Why payments banks? The main objective of payments bank is to widen the spread of
payment and financial services to small business, low-income households,
migrant labour workforce in secured technology-driven environment. With
payments banks, RBI seeks to increase the penetration level of financial
services to the remote areas of the country.
System
|
Access Deposits
|
Advance Loans
|
Make Payment
|
Commercial
Banks like SBI, PNB
|
YES
|
YES
|
YES
|
Payment
Network operations (Master Card, Visa)
|
NO
|
NO
|
YES
|
Payments
Bank
|
YES
|
NO
|
YES
|
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Source: Wiki, The Economic Times. Complied and Presented by Preetham Shetty & Co. Chartered Accountants
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