Question

Consider the following statements about the Payment banks:

Which of the above statement(s) is/are correct?

• A. Only 1 & 2
• B. Only 3
• C. Only 1 & 3
• D. None of the Above

Answer 1

The correct option is B Only 3

The minimum paid-up equity capital for payments banks shall be Rs. 100 crore. Payment banks can be opened by mobile phone companies, consumer goods companies, India Post; even scheduled commercial banks can open payment banks as their subsidiaries.These payment banks will provide payment services and deposit products to its target customers which will be small businesses and low income households.
The foreign shareholding in the payments bank would be as per the Foreign Direct Investment (FDI) policy for private sector banks as amended from time to time.
Criticism against payment banks
Instead of establishing another type of banks, the existing PPIs like Airtel Money could be mandated to give interest on money deposited with them.
Alternatively, even Scheduled Commercial Banks (SCBs) could be asked to give payment services through their mobile banking platform. Since payment banks will not be allowed to give out loans, the aim of financial inclusion will not be served.
The objectives of setting up of payments banks will be to further financial inclusion by providing (i) small savings accounts and (ii) payments/remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users.