What is Payment Bank License | How to Get Payment Bank License | Eligibility | Procedure - Swarit
Channel: Bada CFO
Date: 2021-09-15

A significant change took place in the Indian economic system after demonetization. Payments bank refers to a brand-new bank model conceptualized by the Reserve Bank of India in 2014. Such banks can accept a confined deposit of up to an upper limit of ₹100,000 per customer, which is likely to increase further. Though payment banks are the latest addition to the banking sector, they do not provide loans as well as credit card facilities. While payment banks render an array of other services such as debit cards, ATM cards, mobile banking, net banking, etc. Moreover, by procuring a #PaymentBankLicense, a bank can operate both current and saving accounts.

A payment Bank License is a mandatory requirement to open a payment bank in India.

Capital Requirements to Obtain a Payment Bank License in India

• A Payment Bank should have a minimum of Rs 100 crores as Paid-up Equity Capital;
• Tier I Capital should be at least 7.5% of the Risk-Weighted Assets.
• Tier II Capital must be limited to a maximum of 100% of the total Tier I Capital.
• A Payment Bank should maintain a minimum capital adequacy ratio of 15% of its Risk-Weighted Assets, which is subject to any higher percentage as may be specified by the Reserve Bank of India) from time to time.
• A Payment Bank is not permitted to deal with sophisticated products. It means that the CAR (#CapitalAdequacyRatio) is ascertained as per the Basel Committee’s Standardised approaches. 

Who is Eligible to Acquire a Payment Bank License?

• Individuals/Professionals
• Real Sector Cooperatives
• Public Sector Entities
• Supermarket Chains
• Mobile Telephone Companies 
• Non-banking Financial Company (#NBFCs)
 
There are other applicants too who fit well in the eligibility criteria. 

Mandatory #Compliances for Payment Banks in India 

• A Payments Bank is not allowed to accept #NRI deposits;
• A Payment bank can give ATMs or debit cards but is not allowed to offer loan and Visa administrations;
• A Payment Bank needs to have a minimum paid-up capital of Rs 100 crores;
• A Payment Bank is authorized to accept current deposits as well as Investment Funds Bank deposits from the private ventures up to a defined limit;
• A Payments Bank must use the words ‘Payments Bank’ in its name for differentiating itself from other banks.
• A Payment Bank needs to accept RBI (Reserve Bank of India) Compliances on Data Security, Cyber Laws, Web-Banking, Electronic Banking and Technology Risk Management;

Payment Bank License Procedure    

Step-1
Firstly, as per RBI regulations, the applicant has to incorporate a Public Limited Company under the Companies Act, 2013, wherein the main purpose should remain to act as a payments bank.
Step-2
Now, file an application to the Chief General Manager of #RBI to grant the payment bank license. 
Step-3
Thereby, the #ExternalAdvisoryCommittee (EAC) shall assess the application and summon the applicant to validate the information given by him.
Step-4
If an applicant successfully meets the eligibility criteria, then RBI shall grant him the license.  
Step-5
Subsequent to the previous step, the name of the concerned applicant shall be displayed on the official RBI Site. 
Step-6
Lastly, after getting the consent to operate as a payment bank from the RBI, the bank has to be set up within 18 months.  

The Final Words 

If you are looking for an end to end assistance on obtaining a payment bank license, we are here to assist you with the preparation of a payment bank license application to fulfil your other requirements.

Read more: https://swaritadvisors.com/payment-bank-license

Phone:- 9821399320
Email:- info@swaritadvisors.com
Want to know more about #SwaritAdvisors?


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