2. What is Payment Bank?
A payments bank is like any other bank, but operating on a smaller scale without involving any credit risk. In simple words, it can carry out most banking operations but can't advance loans or issue credit cards. It can accept demand deposits (up to Rs 1 lakh), offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers. Airtel has launched India's first live payments bank, Paytm is the second such service to be launched in the country. India Post Payments Bank is the third entity to receive payments bank permit after Bharti Airtel and Paytm. The main objective of payments bank is to widen the spread of payment and financial services to small business, low-income households, migrant labour workforce in secured technology-driven environment. With payments banks, RBI seeks to increase the penetration level of financial services to the remote areas of the country.
