New Delhi, February 2: No wonder India is developing at high pace but we still need to get into the corners of it to reach to those who are having no access to the advanced technology and services. People are unaware about many such facilities from which they could reap more benefits. Payments Banks is one of those service about which people don’t have fair idea of how much useful it is on their daily basis.
Now days we are constantly bombarded by this term ‘Payment Banks’. Let’s get into its details.
What is Payment Bank?
A Payment bank is a bank which operates on small scale. These banks will especially cater to the people who have low income in order to open bank accounts at nearby outlets and will offer basic banking services like cash deposits, money transfer and withdrawal facilities.
Why do we need Payment Banks in the presence of other banks?
In the villages where there are no banks, for people who have low income – here is the utmost need of Payment Bank. Payment Bank aims to reach in the corners of the rural areas and also in the urban areas to make easy for people to access. Importantly if one needs to open an account in the Payment banks, can open it with any desired amount. This bank caters to people having low income, households, laborers, small business, and unorganized sector entities. We need Payment banks because it will make easy to access and transact unlike other banks and their formalities.
How do you open an account?
Interestingly the process to open an account is paperless. Adhaar Card number or Pan Card number is what all you need to open an account. The account will be opened through a paperless process within minutes through Aadhaar-based paperless electronic know-your-customer process. You need to visit the nearest retail outlet of Payment banks or nyou can even do it with a mobile app and you need to fill in your details, also pay the depositing amount. This amount can be in any value. There are no limits on the money you deposit while opening an account.
What services does it offers?
Small deposit amounts: Demand deposits and savings bank deposits from any individuals, entities and other small firms will be accepted. However, NRI deposits will not be accepted. A Payments bank can accept a restricted deposit of up to Rs 1 lakh per customer and will pay interest on those balances just like a savings bank account.
Issuance of ATM/Debit cards: It provides debit cards and ATM cards that can be used on ATM network of all banks. But a Payments bank cannot provide loans and credit cards to its customers.
Payments services: It can enable the transfers and remittances through a mobile phone. It also offers services like automatic bill payments and digital purchases through the mobile phone. These banks can use any channel for making or transferring of payments through branches, Automated Teller Machines (ATMs), Business Correspondents (BC), mobile banking and can be accessed through point of sales terminals adhering to the terms and conditions
Internet Banking: The payments bank can accept remittances to be sent to or receive payments from multiple banks under a payment mechanism approved by RBI, which are RTGS / NEFT / IMPS.
Objectives of Payment Banks:
The Reserve Bank of India’s main objective behind payments banks is to achieve financial inclusion of millions of people, particularly in the remote areas of the country. It is to serve the need of transaction and savings account in rural areas.