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What is Payment Banking and what you need to know?

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Written by Sanjeev

What  is payment bank?
Payment bank are new banking system different from normal bank like it doesn’t lend money or give credit card  as generally  normal bank does. Payment bank only run saving accounts.

Does payment  bank has transaction limit  and how much does it charge?
Yes, One  can  deposit up to  1 lac ₹with daily limit for transaction  of 49990₹.Payment bank transact least of 10₹.

For fund transfer

  • Within Airtel payment bank digitally  is free
  • From Airtel payment bank to other bank digitally  is 0.5% of transferred amount
  • Within Airtel payment banks  from bank points is 0.5% of transferred amount
  • From Airtel payment bank to other bank using bank points is 1% of transferred amount.

For services

  • For transaction of 10₹ to 4000₹ Airtel payment bank charges 5₹ to 25₹.
  • Transaction above  4000₹ will be charge with 0.65%.

Accounts:

  • Account closure is 50₹
  • Account opening  is free with minimum deposit of 100₹
  • Cash deposit is free

Main Purpose of Payment Bank?
As per stated by the committee formed at RBI,  there was a need of payment bank for transaction purpose in small and remote areas where bank haven’t reached.

How many company have been given license for payment  bank?
There are 8 company which are given license for payment bank

  • Aditya Birla Nuvo,
  • Airtel M Commerce Services,
  • Department of Posts,
  • FINO PayTech,
  • National SecuritiesDepository,
  • Reliance Industries,
  • Paytm,
  • Vodafone M-Pesa.

Who  can opt for payment bank?
Airtel is the first company to start payment bank service among the others,  and  as per Airtel  customer and non-Airtel customer  can opt for payment bank account. Mobile number of Airtel customer will be  used as account no.  and document for payment bank  is Aadhar Base E-KYC  of  the customer.

What’s  the benefit of Airtel Payment Bank?
Currently Airtel offers 7.25% of interest  rate,  which is higher than normal bank  rate of interest,  whereas Airtel is also helping to develop nation-wide system to accept payment through mobile phone’s.
For merchants, Airtel will not charge any fees for now,  so the Merchant don’t  need to pay anything to accept money via Airtel payment bank.

Paytm has announced its Payment Banking and was to start from 15th January, 2017. We are yet to get some more information about it’s interest rates and other details. Will update again. Keep reading.

About the author

Sanjeev

A newbie in writing.. Finding his way into blogging and web. Professionally a Production Engineer. Loves playing games, reading.

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