Payment Banks

Payment Banks are a type of financial institution in India designed to promote financial inclusion by providing basic banking services to underserved and low-income populations. They cannot offer full-fledged lending services but can accept deposits and facilitate payments. Origin Introduced by the Reserve Bank of India (RBI) in 2015. Recommended by The Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households, chaired by Nachiket Mor under the leadership of then RBI Governor Raghuram Rajan. Purpose: To extend banking access to low-income and rural households while studying their savings and transaction patterns.

Key Features Deposit Services Accept savings and current deposits (up to a prescribed limit, e.g., ₹2 lakh per customer). Payment Services Provide remittances, utility bill payments, and money transfers. No Lending Cannot issue loans or credit cards like traditional banks. Other Services Issue debit cards, facilitate mobile banking, and provide insurance and pension products. Target Audience Low-income households, small businesses, and unbanked populations in rural and semi-urban areas.

Example: Payment Banks in India India Post Payments Bank (IPPB) Airtel Payments Bank Fino Payments Bank Paytm Payments Bank..