{"id":19040,"date":"2020-11-06T12:07:37","date_gmt":"2020-11-06T06:37:37","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=19040"},"modified":"2025-01-07T18:05:19","modified_gmt":"2025-01-07T12:35:19","slug":"online-payment-bank-license-things-you-need-to-know","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/online-payment-bank-license-things-you-need-to-know\/","title":{"rendered":"Payment Bank License &#8211; Things you need to Know"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Digital transactions have completely revolutionized the way we will deal with our payments today. After demonetization, the Indian government pays extra attention to digital payment to strengthen the economy. It\u2019s safe to say that at present our economy and banking services have now become nearly cashless. The payment banks are referred to as a source of payment gateways that allow the user to complete the money transaction in a cashless way. These payment gateways are highly-secured as they are protected by military-grade encryption. Having said that, we will explore in this blog everything related to the <a href=\"https:\/\/corpbiz.io\/payment-bank-license\" title=\"Payment Bank License\"><strong>Payment Bank license<\/strong><\/a>.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/online-payment-bank-license-things-you-need-to-know\/#Payment_Banks_as_Finance_related_Services\" >Payment Banks as Finance related\nServices<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/online-payment-bank-license-things-you-need-to-know\/#What_are_the_Basic_Characteristics_of_Payment_Banks\" >What are the Basic\nCharacteristics of Payment Banks?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/online-payment-bank-license-things-you-need-to-know\/#Who_are_the_Eligible_Applicants_for_Payment_Bank_License\" >Who are the Eligible Applicants for\nPayment Bank License?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/online-payment-bank-license-things-you-need-to-know\/#What_is_the_Procedure_to_avail_Payment_Bank_License\" >What is the Procedure to avail Payment\nBank License?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/online-payment-bank-license-things-you-need-to-know\/#Conclusions\" >Conclusions&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Payment_Banks_as_Finance_related_Services\"><\/span>Payment Banks as Finance related\nServices<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The RBI suggested the notion of a specialized bank model in\n2013, known as a Payment bank. Like other conventional banks, the payment bank\noffers a plethora of finance related services except for facilitating credit\ncards and loans. The main goal to deploy such a bank was to provide easy access\nto payment facilities to underprivileged groups and support small enterprises.\nThrough the swift deployment of Payment banks, the Reserve bank wishes to\nbroaden the access of finances to remote areas. Bharti Airtel was the one who\ntakes the initial step to launch India\u2019s first payment bank.&nbsp;Those who\nwant to indulge in such a business model need to avail of the Payment Bank\nLicense in the first place.&nbsp;<\/p>\n\n\n\n<p>Payment Banks are swift, secured, and sensible when it comes to the online fiscal transaction. They have rejuvenated the way we handle our finances and day to day operations. They allow users to avoid apparent hindrances that they often encounter whilemaking payment through conventional means.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" width=\"671\" height=\"377\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-17.png\" alt=\"Payment Banks as Finance related Services\" class=\"wp-image-19041\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-17.png 671w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-17-300x169.png 300w\" sizes=\"(max-width: 671px) 100vw, 671px\" \/><\/figure><\/div>\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/small-finance-bank-license\/\">Guide on Small Finance Bank license<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Basic_Characteristics_of_Payment_Banks\"><\/span>What are the Basic\nCharacteristics of Payment Banks?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It\u2019s important to note down that conventional banks and payment\nbanks are not alike. The services like credit cards and loans aren\u2019t available\nat Payment bank. But despite this, these banks offer a string of productive\nbenefits to the customers, which are as follows:&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Deposit of 1 Lakhs&nbsp;<\/h3>\n\n\n\n<p>The Payment banks account holders are only allowed to deposit of\nOne Lakhs rupees in their account. Remember, this is the maximum threshold\nlimit for the account holders. The Reserve Bank has imposed this limitation in\nthe purview of protection of customer\u2019s interests. Such banks also render the\nleverage when it comes to depositing the amount. Now up to the users to deposit\ntheir amount either wholly or partially.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">No Constraints on Minimum Account\nBalance&nbsp;<\/h3>\n\n\n\n<p>One of the prominent benefits that customers avail from Payment\nBanks is that they can hold a minimum account balance, unlike regular banks.\nThe concept of zero balance fits here.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Operates both Current and Saving\nAccounts<\/h3>\n\n\n\n<p>Payment Bank License holders are eligible to offer both current\naccount and saving account facilities to the customers. The savings account\nwill allow the customers to attain the quarterly benefits; meanwhile, the\ncurrent account doesn\u2019t offer such a benefit to general customers. This benefit\nis only available to the merchants. The standard savings account offered by\nPayment Bank furthers gets bifurcated into multiple tiers, depending on the\ncustomer\u2019s account balance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Availability of Physical and Virtual\nDebit Card<\/h3>\n\n\n\n<p>The Payment Banks offers physical as well as a virtual debit\ncard to the customers to ensure a swift and seamless transaction. The virtual\ndebit card is free from additional charges, meanwhile, the physical card\nattracts annual service charges from the customers.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Online Fund Transfer<\/h3>\n\n\n\n<p>As the Payment Bank function utilized the digital centralized\nplatform to operates, they offer plenty of services related to the online fund\ntransfer. Its customers have access to online services such as IMPS, NEFT, etc.\n<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_are_the_Eligible_Applicants_for_Payment_Bank_License\"><\/span>Who are the Eligible Applicants for\nPayment Bank License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>The RBI has drafted a long list of the contenders who are eligible to avail Payment Bank License.&nbsp;<\/strong><\/em><\/p>\n\n\n\n<ul>\n<li><a href=\"https:\/\/corpbiz.io\/nbfc-registration\" title=\"NBFC Registration in India\">NBFC<\/a> i.e. Non-Banking Finance Companies.<\/li>\n\n\n\n<li>Companies working in a public sector<\/li>\n\n\n\n<li>Telecom companies&nbsp;<\/li>\n\n\n\n<li>Supermarket chains&nbsp;<\/li>\n\n\n\n<li>Group of promoters having a joint venture with a commercial bank.&nbsp;<\/li>\n\n\n\n<li>Corporate Business Correspondents (BCs)<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Governing Bodies<\/h3>\n\n\n\n<ul>\n<li><em><strong>Companies Act, 2013<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>.<\/li>\n\n\n\n<li>Banking Regulation Act, 1949.<\/li>\n\n\n\n<li><a href=\"https:\/\/corpbiz.io\/fema-compliance\" title=\"FEMA Compliance\">FEMA<\/a> (Foreign Exchange Management Act, 1999).<\/li>\n\n\n\n<li>RBI Act, 1934.<\/li>\n\n\n\n<li>Payment and Settlement System Act, 2007.<\/li>\n\n\n\n<li>DICGC Act, 1961.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Procedure_to_avail_Payment_Bank_License\"><\/span>What is the Procedure to avail Payment\nBank License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>To avail such a license, the applicant must turn its business entity into a public limited company as per RBI regulation and Company Act, 2013.&nbsp;<\/li>\n\n\n\n<li>In the next step, the applicant must submit a written application to the RBI\u2019s Chief General Manager regarding the issuance of the Payment Bank License. The applicant will then verified by the External Advisory Committee (EAC). During the verification process, the authority may call the applicant for further questioning regarding the legitimacy of the application.&nbsp;<\/li>\n\n\n\n<li>Once satisfied with the given information, the RBI shall validate the application and finally grant the license to the applicant. The information regarding the grant of the license will be displayed on the RBI\u2019s official site. Upon issuance of the license, the applicant must lay the foundation of the bank and initiates the services within eighteen months.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusions\"><\/span>Conclusions&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Government of India under the Digital India initiative constantly striving to broaden access to online banking for Indian customers and corporate. Unfortunately, setting up such a business model is not an easy undertaking as it lures a significant amount of funding and a minimum paid up capital of 100 cr.In case if you aren&#8217;t accustomed to legal obligations for obtaining Payment Bank License then our experts can help you out. All you need to connect with one of the team members and get precise guidance on the same. The <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a> experts will deal with your queries on a priority basis.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/complete-outlook-of-payment-bank-license-online-in-india\/\">A Complete Outlook of Payment Bank License<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Digital transactions have completely revolutionized the way we will deal with our payments today. After demonetization, the Indian government pays extra attention to digital payment to strengthen the economy. It\u2019s safe to say that at present our economy and banking services have now become nearly cashless. The payment banks are referred to as a source [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":19057,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[329],"tags":[1183],"acf":{"service_id":"73"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4108,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19040"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=19040"}],"version-history":[{"count":10,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19040\/revisions"}],"predecessor-version":[{"id":68230,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19040\/revisions\/68230"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/19057"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=19040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=19040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=19040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}