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How Payment Bank Will Change The Banking Sector?

Payment Banks is a new system of the bank that is similar to the traditional banking system but is different in many ways. This type of banks provides their own wallet where the money is stored and the wallet holder does all the transactions from the payment wallet. The payment banks cannot provide loans/ credit card to the customer and only wallet payment or digital debit card is allowed also there is a limitation of maximum Rs.1, 00,000 that can be deposited.

Why Payments Bank?

In the year 2014 RBI introduced a new model of the banking system by surveying the needs and requirement of the market. This survey is headed by Mr. Nachiket Mor with a team of a financial advisor. The reason for this introduction of the new banking system is-
  • ·         To introduce low pay grade working class people into the financial system.
  • ·         To embrace the digital method of payment
  • ·         To promote digital India
  • ·         To reduce income tax theft

List of Payments Banks

The list of Banks RBI licensed in-principle to 11 entities-
  • ·         Aditya Birla Nuvo
  • ·         Airtel M Commerce Services
  • ·         Cholamandalam Distribution Services
  • ·         India Post Payments Banks
  • ·         Fino Paytech
  • ·         National Securities Depository
  • ·         Reliance Industries
  • ·         Vodafone M-Pesa
  • ·         Paytm
  • ·         Tech Mahindra
  • ·         Sun Pharmaceuticals

The advantage of Payment bank

Payment Bank has an advantage that does not offer by any payment method. The payment by payment bank is very easy, the payer has to just scan or input the payee mobile number and the payment is completed.   

The disadvantage of Payment bank

The disadvantage associated with the payment bank is that we cannot get credit cards or loan facility. The money we receive from the digital wallet is not transferable as it can be only transferred digitally and we still need a traditional bank to withdraw physical cash. However, the debit card is also available by some digital wallet which can be used in ATM machines.

The similarity in Traditional Bank and Payment Bank

There are few similarities in the traditional bank and payment banks like the requirement of IFSC Code for NEFT/RTGS/IMPS. For example i,f a person has to transfer money from India post payment bank wallet to other person bank account the he need the India Post Payment Bank IFSC Code.

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