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R B I grants ‘in-principle’ nod for 11 Payment Banks

Yatheendradas C.k. at 08:03 PM - Aug 19, 2015 ( ) Views: 1,178

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Reliance Industries, Bharti Airtel, 9 others get RBI nod for payments banks

The Reserve Bank today granted 'in-principle' approval to 11 entities, including Reliance Industries, Aditya Birla Nuvo, Vodafone and Airtel...


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Yatheendradas C.k. at 09:04 PM - Aug 19, 2015 ( )

PAYMENT BANKS

 

These companies selected will be given "in-principle" approval for 18 months, after which they will be given licences if they fulfil all conditions stipulated by the RBI.

A total of 41 companies had applied for the permit, the RBI said, adding "some of the entities who did not qualify in this round, could well be successful in future rounds."

Payments banks can accept deposits of up to Rs 1 lakh and can offer current and savings account deposits. They can also issue debit cards and offer internet banking. But they are not allowed to lend or issue credit cards.

 

They are part of India's financial inclusion push, meant to bring banking services to a country where less half the adult population has a bank account.

 

Dos of payments banks

 

* Has to use the word ‘Payments Bank’ in its name to differentiate from other banks

 

* Accept demand deposits, i.e., current deposits, and savings bank deposits from individuals, small businesses and other entities

 

* To hold a maximum balance of Rs one lakh per individual customer.

 

* Will be allowed to set up branches, ATMs, BCs

 

* Allowed to issue debit cards also offer internet banking

 

* Can accept a large pool of money to be remitted but at the end of the day the balance should not exceed Rs one lakh

 

* Can accept remittances to be sent to or receive remittances from multiple banks

 

* Permitted to handle cross border remittance transactions in the nature of personal payments / remittances on the current account

 

* Allowed to distribute mutual fund products, insurance products and pension products

 

* Bank can also undertake utility bill payments

 

Don’ts of payments banks

 

* No NRI deposits should be accepted   

 

* Cannot issue credit card

 

* Not allowed to set up subsidiaries to undertake non-banking financial services activities   

 

* Other financial and non-financial services activities of the promoters should not be mingled with the working of payment banks

Sundararajan Easwaran at 08:50 PM - Aug 19, 2015 ( )

SGX Nifty is down 66.5 points now.  Is it due to this RBI announcement?

Sundararajan Easwaran at 08:49 PM - Aug 19, 2015 ( )

Sir,

Will it lead to BNF down tomorrow and the licensed ones to see new highs?

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