Payments bank
Payments bank is type of bank with limited banking services. These type of banks will help more people to get into the banking system, where they can maintain a small savings (upto Rs 1,00,000) and can use the banking technology for payments and remittances. The people who benefit more are the migrant labour workforce, low income families, small business groups and unorganized sectors.
Can I deposit my savings in my payment bank account?
Yes, you can deposit your savings in your payment bank account. The maximum deposit is Rs 1,00,000 per individual.
Will I get a Debit Card / ATM Card?
Yes, you will get Debit card/ ATM card.
Can I get a Credit Card from Payments bank?
No, payments bank cannot issue credit cards as per RBI guidelines.
Will I get a Loan from payment bank?
No, in the Reserve Bank guidelines, payments banks cannot undertake any sort of lending activity. Only regular banks have the right to issue loans. RBI is avoiding any sort of risks associated with credits and loans for payments bank.
Is it safe to deposit in Payments Bank?
Payments banks need to maintain Cash Reserve Ratio (CRR) with the RBI. Also payments bank must invest 75% of its demand deposit balances in Statutory Liquidity Ratio (SLR) eligible government securities and treasury bills. To be more safe, payments banks must maintain a maximum of 25% in current and fixed deposits with other scheduled commercial banks.What will be the transaction charges?Low Transactions charges. With the usage of technology, payments banks can offer very low transaction charges by having less human involvement. RBI is insisting the payments banks to use internet / electronic mediums to reach the remote areas.Is this only for Technical savvy peopleNo, Payments banks will have business correspondents, who will guide non technical people like farmers and senior citizens to use their products and services through simple mobile operations. This will be one of the most challenging areas for payments banks. They have to train business correspondents, who will walk into remote areas and help people to connect to the banking systems. This will open up new job avenues for our younger generation.
Dedicated bank types offer a greater level of service for one type of banking, rather than having all your banking needs serviced by those whose resources are spread thinly across many types of banking.
This is especially good if you are only interested in one type of banking. Then you don’t have other services being shoved in your face constantly, and someone attempting to sell you something more from their bank catalogue.
All said very well about it but does it really work? Can we not increase the limit from 1,00,000 to a higher denomination? But it really is helpful for our farmers,migrant laboures. But then there is no loan option in this type of bank which is a disadvantage. This might be just a stepping stone to get themm together in the mainstream of commercial banks or to incalcuate the habbit of saving.