Friday 13 June 2014

RBI to come out with Payment Bank soon- WHAT IS A PAYMENT BANK?


Shri. Nachiket Mor, Head of the Panel on Financial Inclusion of Small Businesses and Low-Income Households.
A Reserve Bank of India (RBI) panel on Financial Inclusion of small businesses and low-income households in India headed by Shri. Nachiket Mor, has recommended that a special category of banks, called Payments Banks, be set up to widen the spread of payment services and deposit products to small businesses and low-income households in Asia’s third-largest economy, where about 40% of the population still do not have access to formal financial services.

A Payment Bank will provide deposit and payment services but can't lend. Such banks will have a minimum entry capital requirement of Rs.100 crore, one-fifth of what a full-service bank requires, since they will have a near-zero risk of default. Payments banks will be required to comply with all RBI guidelines relevant for commercial banks. Existing banks should be permitted to create a payments bank as a subsidiary.



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