Important Points about Payments Bank

    Important Points about Payments Bank
    Important Points about Payments Bank:
    Important points that we have to know about Payments Bank was given here, which will be more helpful for the candidates those who are preparing for the upcoming exams.

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    PAYMENTS BANK

    1).APayments bank is a type of non-full service niche bank in India

    2).On 23rd September 2013, RBI formed a Committee onComprehensive Financial Services for Small Businesses and Low Income Households under the chairmanship ofNachiket Mor

    3).The Nachiket Mor Committee submitted its report on 7th January 2014 recommending the formation of a new category of bank called payments bank

    4).On 27th November 2014 RBI released the final guidelines for payments banks

    5). 41 entities had applied to the RBI for Payments bank license and anExternal Advisory Committee(EAC) headed by Nachiket Mor evaluated the applications

    6).During the presentation of theUnion Budget it was announced that theIndia Post will use itslarge networkto runpayments bank

    7).On 19th August 2015 RBI gavein-principle licenses to 11-entities to establish payments bank with avalidity period of18 months. The following are the 11-entities which were granted licenses
    ·        Aditya Birla Nuvo
    ·        Airtel M Commerce Services
    ·        Cholamandalam Distribution Services
    ·        Department of Posts
    ·        FINO Pay Tech
    ·        National Securities Depository
    ·        Reliance Industries
    ·        Dilip Shanghvi – founder of Sun Pharmaceuticals
    ·        Vijay Shekhar Sharma – CEO of Paytm
    ·        Vodafone M-Pesa
    ·        Tech Mahindra

    8).The RBI will consider to grant full licenses underSection 22 of theBanking Regulation Act 1949 after it is satisfied that all the conditions have been satisfied the above entities

    9).Payments bank can only receive deposits and provide remittances

    10).Itcannotcarry outlending activities

    11).The payments bank targets at
    ·        Migrant laborers
    ·        Low income households
    ·        Small businesses
    ·        Unorganized sector entities

    12).The minimum capital requirement to establish a payments bank isRs. 100 crore

    13).For the1st 5 years the stake of the promoter should be40%minimum

    14).Thevoting rights in payments bank are regulated by the Banking Regulation Act 1949

    15).The voting right of any shareholder is capped at10%, it can be increased to26%by the Reserve Bank of India(RBI)

    16).RBI also regulates any acquisition over than5%

    17).Foreign investments will be allowed in these banks as per the rules of FDI in private banks of India

    18).Payments bank can accept utility bills butcannot form subsidiaries to undertake non-banking activities

    19).Initially the deposits will be capped atRs. 1,00,000 per customer but can be raised by the RBI based on the performance of the bank

    20). 25%of branches of payments banks should be in theunbanked rural areas

    21).A bank will be licensed as ‘Payments bank’ by the RBI under the Section 22 of the Banking Regulation Act 1949 and will be registered asPublic Limited Company under the Companies Act 2013

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