Difference between Payments Bank and Small Banks- Banking Awareness

    Difference between Payments Bank and Small Banks- Banking Awareness
    Difference between Payments Bank and Small Banks- Banking Awareness:
    Dear Readers, here we have given the important difference between the Payments Bank and Small Banks, important Banking Awareness Material which will be useful for the preparation.



    Payments Banks
    Small Banks
    Who Can Promote
    – Perpaid card issuers, telecom companies, NBFCs, business corresponding, supermarket chains, corporates, realty sector co-ops& PSUs
    – Individuals/professional with 10 years experience in finance, NBFCs, microfinance cos, local area banks
    What They Must Do
    – Have a minimum capital of Rs. 100cr
    – Maintain 75% of deposits in govt bonds
    – Maintain 25% of deposits in other banks
    – Have at least 26% investment by Indians
    – Get listed if net worth crosses Rs. 500cr
    – Have 255 of branches in unbanked areas
    – Be fully networked and technology driven
    – Have Rs. 1 lakh cap for deposits in one a/c
    – Have a minimum capital of Rs 100cr
    – Extend 75% of loans to priority sector
    – Have 25% of branches in unbanked areas
    – Maintain reserve requirements
    – Cap loans to individuals and groups at 10% and 15% of net worth
    – Have a business correspondent network
    What They Can Do
    – Offer internet banking
    Sell mutual funds, insurance, pensions
    – Offer bill payment service for customers
    – Have ATMs card business correspondents (BC)
    – Can function as BC of another bank
    – Sell forex to customers
    – Sell mutual funds, insurance, pensions
    – Can convert into a full- fledge bank
    – Expand across the country
    What They Can’t Do
    – Offer credit cards
    – Extend loans
    – Handle cross-broder remittances
    – Accept NRI Deposits
    – Extend large loans
    – Float subsidiaries
    – Cannot deal in sophisticated financial products

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