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A payment bank is a new model introduced by the Reserve Bank of India(RBI) which facilitates transactions like a regular bank with the exception of lending and issuing credit cards. Payment bank makes banking life better due to the flexibility and convenience they provide.
They also offer a bouquet of services to the consumers through secured digital platforms which help the government in their motive of “Digital India”. It is mandatory to obtain a payment bank license in order to open a payment bank. The Reserve Bank of India (RBI) issues the license as per Section 22 of the Banking Regulation Act 1949.
The minimum required paid-up equity capital for opening a payment bank according to RBI is Rs 100 crore. Also, for the first five years of commencement of establishment, the promoter must contribute at least 40% of the paid up equity capital. The foreign shareholding will be permitted in payment banks for Foreign Direct Investment (FDI) in private banks in India as per the Foreign Direct Investment policy (FDI Policy) as amended from time to time.
RBI has defined a long list of qualified players for the Payment Bank License, as it requires a minimum of Rs 100 crore in the form of paid-up capital. The promoters who qualify for the Payment Bank License procedure include:
The activities permitted include:
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