Payments Banks

Payments Banks

Reserve Bank of India introduced a new type of banks, it is called Payments Banks. Payments Banks are introduced to increase banking facilities and improve digitalisation of transactions.

It took a long time before Payments Banks became a reality.

What is meaning of Payments Banks?

Payments Banks are small banks authorised by RBI to do banking transactions. They are not normal banks but can provide limited banking facilities.

Payments Banks means a small bank authorised by Reserve Bank of India to provide banking facilities. However these banks have restrictions such as they cannot provide loans or credit facilities. Payments banks are not authorised to accept large amounts from account holders. Payments Banks can accept deposits upto 1 lakh from a customer. However RBI can increase the limit.

List of Payments Banks authorised by RBI

Reserve Bank of India has given license to 11 entities to start Payments Bank. However as per our records only 6 have started their Payments Banking operations.

List of Payments Banks authorised by RBI

  1. Aditya Birla Nuvo
  2. Airtel M Commerce Services
  3. Cholamandalam Distribution Services
  4. India Post
  5. Fino PayTech
  6. National Securities Depository
  7. Reliance Industries
  8. Vodafone M-Pesa
  9. Paytm
  10. Tech Mahindra
  11. Sun Pharmaceuticals

As per our records, following Payments Banks are actively engaged in banking services and are first to launch their Payments Banks.


Airtel was the first to launch its Payments Bank.

Difference between Normal Banks and Payments Banks

Normal banks have been in existence from a long time whereas Payments Banks is a new concept introduced recently. We have a large number of banks in India, whereas only around 11 Payments Banks are authorised and a very few Payments Banks are active.

Main differences between Traditional Banks and Payments Banks are:

  1. Every Payments Banks has to include 'Payments Bank' in its name, for example, PAYTM PAYMENTS BANK LTD .
  2. Payments Banks cannot accept deposits from public for large amount, traditional banks can accept any amount.
  3. Traditional Banks can issue Credit Cards, Payments Banks cannot issue credit cards.
  4. Traditional Banks can give loans, but Payments Banks cannot give loans.
  5. Less Investment is required to start compared to commercial banks. Rs. 100 crore is minimum capital requirement to start a payments bank.

Regulations applicable to Payments Banks

  1. Payments Banks should have minimum capital of Rs. 100 crore.
  2. For first 5 years, promoter should continue to hold at least 40% of shares.
  3. FDI rules are applicable similar to normal private banks.
  4. Banks should be fully networked.
  5. Deposits are capped at Rs. 1,00,00 per account holder. RBI can increase it further.
  6. 25% of branches should be in unbanked rural areas.


It is a really good step taken by government and RBI to introduced these small and digitalised banks to increase banking adaption and banking facilities in India.

We believe Payments Banks have better future than normal banks looking at the current rapid changes in technologies.

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