Hello friends, in the present times, the payment bank is becoming very popular, which is working as an alternative to the ordinary bank. Today we will provide you all the information related to payment bank in this article and along with that I will also discuss about the advantages and disadvantages of payment bank.
So to get a special information of the payment bank, click on this What is Payment Bank? How does it work and what are the advantages and disadvantages of Payment Bank? Post Do read till the last.
What is Payment Bank? What is the Payment Bank
Like any other bank, Payment Bank is an institution that works with low credit risk. Payment banks cannot issue credit cards or loans. The system was set up in September 2013 under the supervision of RBI. The main objective of setting up such a system is to make it easier for the unorganized sector to open a bank account.
What kind of operations do these banks do?
These banks accept demand deposits up to ₹ 1,00,000. These banks do not provide any kind. They do business in mutual fund distribution as well as they sell insurance products. These banks do not allow NRIs to deposit any amount. They provide ATM card services to their customers which they can use to withdraw money. These banks also use UPI as a form of transaction processing.
Who controls these banks?
These banks are registered under The Indian Companies Act, 2013 but still they are governed by both The Indian Companies Act, 2013 and The Banking regulations Act, 1949. Like other banks, these banks are also required to maintain the Cash Reserve Ratio.
Benefits of payment banks-
- Since these banks do not require the account holder to come to any office to open an account, it is very easy to operate such a bank account.
- These are a good alternative to the formal bank. If one has an account with this type of bank, then he does not need to open an account in any formal bank.
- There is no need to maintain any monthly, quarterly or annual balance amount to keep the services running.
- These banks are easy to operate. They usually have mobile software, using which one can perform all the tasks that a formal bank would require to go through a lot of paperwork.
Disadvantages of payment banks-
- Most of the people in India are not even aware that such service is available.
- People do not take advantage of this facility even after knowing about this system because not much incentive is given for opening the account.
- People in the unorganized sector do not know the use of technology, due to which they do not understand how the payment bank works.
List of Payment Banks in India / List of Payment Banks Available in India
At present there are 6 companies which are providing this service.
Hope you have understood every single information related to payment bank. You must also take the facility of Payment Bank and follow this article Payment Bank What? How does it work and what are the advantages and disadvantages of Payment Bank? Please share thank you.