The Indian economic structure has been fully reframed by demonetization. People
are depending more on paperless transactions nowadays and tend to use digital payment portals.
It has given a sudden boost to earlier outcast e-wallets or mobile wallets. Payment banks are
the main niche of such online gateways. One needs to acquire a payment bank license to start any
Payment Bank is approved by the Reserve Bank of India (RBI). The maximum amount of money currently reserved for these types of Banks is INR 1 lakh per client which will be continuously upgraded. Both current and savings accounts can be operated under this Bank.
Payment banks shall be licensed under the Companies Act, 2013 as a public limited company. And accredited under Section 22 of the Banking Regulation Act, 1949, subject to certain licenses to regulate their operations, in particular with regard to the reception of payments necessary and the provision of services.
They can provide a service that links to bank cards, online banking, and ATM cards Payment Bank is also known as a split Bank will be allowed to set up shops (branches), ATMs, business books, etc. However, it will be limited to the activities authorized by the Bank under the Banking Regulation Act, 1949. The minimum amount paid by the bank to pay will be one hundred thousand. These payment banks are licensed and certified under a regulatory body.
Legalraasta will simplify your licensing process by providing services in Delhi NCR, Gujarat, Mumbai, Bengaluru, Chennai, and all other cities in India.
Payments Bank refers to a new bank model that the Reserve Bank of India (RBI)
conceptualized in 2014. Such banks may accept a limited deposit of up to a maximum limit of
approximately 100,000 per customer, which is further increased. While payment banks are a recent
addition to the banking industry, the issuing of loans and credit card facilities is not advantageous.
While payment banks provide a range of other services, such as debit cards, ATM cards, mobile banking,
net banking, etc. In addition, a bank can run both current and saving accounts by acquiring payment
Under the Banking Regulation Act, 1949, the payment bank or differentiated bank is allowed to build new outlets such as Automated Teller Machines (ATMs), Business Correspondents (BCs), but banks do not start operations. It should also be 100 crores or more of the minimum paid-up capital of the payment bank.
The core objective of the Payments Bank is to expand payments and financial services in a stable, technology-driven environment to all low-income households, small businesses, and migrant workers. The Reserve Bank of India aims to penetrate financial support through the support of payment banks in all remote areas of India. With a secure payment gateway for all transactions, it aims to redefine the Indian economy.
As a minimum pay-up capital of 100 crores is required, the Reserve Bank of India has
laid down a long list of qualified players for the Payment Bank license. Let’s take a sneak peek
qualifying promoters who can execute the licensing procedure for the Payment Bank:
Under these government bodies/laws, a Payment Bank must be registered:
Only deposits up to a maximum of 1 lakh can be approved by the payment banks. The clients have to comply with the designated limit, and at any point in time, no one can pass that limit. One may choose to completely or partially deposit a number. RBI has set that end in order to protect the interest of the consumer and in terms of the almost new existence of such banks.
The payment bank, which provides both physical and virtual debit cards, is another unique feature. The debit cards give users the benefit of using all ATMs at domestic borders, including abroad. There are no additional cash withdrawal charges required on virtual debit cards. The actual debit cards are often accompanied only by an annual fee.
Payment banks streamline the process of making and getting money across digital channels, unlike conventional banks. It allows clients to move online funds to providers such as NIFT, IMPS, and many others.
Given where you live, since it operates digitally, you can easily obtain the services of payment banks. Payments Banks minimize the need to visit a physical bank in order to deposit or withdraw money. By simply succeeding in a payment bank license, anyone can start a payments bank business online without needing a physical outlet.
In India, the Capital Requirements to get a Payment Bank License are:
The scope of the functions of the Payment Bank in India can be summarized
MoA and AoA, Shareholding pattern of the promoter entity, organizational stocks pattern, development finance financial statements for the past 5 years (Include important economic indicators), and income tax returns for the past 3 years.
The names of all the businesses and individuals in the promotional group
(including non-financial, financial, and overseas businesses) with the details listed
Now that you have a good look at payment banks, you should be interested in setting
them up. Therefore follow these steps to obtain a payment bank license:
Required Compliance Bank Payments in India can be summarized as:
Before getting into trouble with the documentation and the broader licensing banking
system, it is important to determine the position of payment banks in the coming years.
At present, Payments Banks intend to convert to SFBs (small financial banks) can only
apply for such a license after five years of operation. In practice, existing banks (PBs), which have
completed five years of service and are citizen-controlled, are also eligible to be transformed into
SFBs (small financial banks) after complying with all regulatory and legal requirements of various
authorities and guidelines.
According to the RBI, the minimum wage for SFBs was ordered at ₹ 200 Crore. In contrast, certain regulations will be amended to further strengthen the role of UCBs in promoting investment and reducing the risk of harassment in co-operative banking (urban) presentations. In addition, it has decided to bring in UCBs with assets of ₹ 500 Cr. and more, under the CRILC reporting framework (“Central Credit Information Center”).
Legalraasta is one of the channels that coordinates and links you to consistent
practitioners to fulfill both your legal and financial requirements. Yeah, with our legal service, our
customers are delighted. They have consistently regarded us highly and given frequent updates because of
our emphasis on simplifying legal requirements.
Our clients can also keep track of the progress on our website at all times. Our professional representatives are just a phone call away if you have any concerns about the Payment Bank License process. Legalraasta can guarantee that it is charming and smooth for your contact with professionals.
LegalRaasta was founded on the principle that sophisticated legal and taxation services should be simple, modern, and inexpensive. We can serve our clients more efficiently thanks to cutting-edge practise technology.