Payment Banks Current Affairs - 2019

Category Wise PDF Compilations available at This Link

Payment Banks need RBI’s Prior product approval

The Reserve Bank of India (RBI) has notified entities that have been granted a payments bank (PB) licence will need to take specific approval for products they would be offering to customers.

In this regard, RBI has issued separate operating guidelines for payments banks in view to focus on financial inclusion.

Key Facts

  • Employee of Payment Bank should be available for sufficient duration at a fixed location to attend customers. They must at least have 25% of access points in un-banked rural areas.
  • The main mandate of Payment Banks is to offer remittance services. They will be not allowed to lend.
  • Payment Banks can also offer simple financial products like insurance and mutual funds.
  • The RBI may place suitable restrictions on the design, functioning, or other features of the product of Payment Banks.
  • RBI may even discontinue the product launched by Payment banks if it feels that the product is not suitable for customers.
  • RBI it will have no objection to payments banks making arrangements with other scheduled commercial bank or small finance bank.

Background

RBI had granted in-principle licences to 11 payments banks in August 2015.  While three out of 11 PBs have dropped out, others will have to start operations within 18 months of receiving in-principle approval.

Month: Categories: Business, Economy & Banking

Tags:

Union Cabinet approves setting up of India Post Payments Bank

The Union Cabinet has given its approval for setting up the India Post Payments Bank (IPPB) as a Public Limited Company under the Department of Posts.

It will have 100% Government of India (GOI) equity and shall be established with total expenditure of 800 Crore rupees. Now, the IPPB will obtain banking licence from RBI by March 2017 and by September 2017.

Key Facts

  • IPPB will start operations in March 2017 in about 50 districts and will cover the entire country by the end of FY 2018-19.
  • It will generate employment opportunities for about 3,500 skilled banking professionals, will set up 650 branches and 5,000 ATMs across the country.
  • Services of IPPB will be available across the country through its 650 payments bank branches.
  • Its services will be linked post offices and alternative channels riding on modern technology including ATMs, mobiles, simple digital payments and PoS/m-PoS devices etc.
  • It will also generate opportunities for propagating financial literacy across the country and help furthering the cause of financial inclusion.
  • The Secretary, Department of Posts will be the Part time, Non-Executive Chairman of the Bank.

Comment

The India Post Payments Ban will benefit all citizens, especially the 40% of the country’s population that is outside the ambit of formal banking in the country. It will leverage the Department of Post’s network, resources and reach, to make simple, low-cost, quality financial services easily accessible to customers all over the country.

Background

Setting-up of the IPPB to further financial inclusion was one of the budgetary announcements during 2015-16. In September 2015, the Department of Posts along with other 10 entities had received in-principle approval of the RBI to set up Payments Bank.

Some of functions of Payments Bank: (i) It can hold a maximum balance of 1 lakh rupees per customer. (ii) It can an issue ATM/debit cards but not credit cards (iii) Offer payments and remittance services (iv) Deal in simple financial products like insurance products and mutual fund units. (v) It cannot undertake lending service.

Month: Categories: Governance & Politics

Tags: