In August 2015, the Reserve Bank of India (RBI) provisionally approved the establishment of payment banks in India for 11 entities, among which was the Department of Posts. This move was part of a broader initiative to enhance financial inclusion across the country, providing a platform for small businesses, low-income households, and others to access banking services more conveniently.
Airtel Payment Bank led the way as the first to launch among the newly established payment banks, setting a precedent in this innovative banking sector. Following its lead, several other entities such as Paytm Payment Bank, Fino Payments Bank, and Aditya Birla Payments Bank also commenced operations, contributing to the diverse landscape of payment banking in India and expanding the reach of financial services to underserved segments of the population.
In this article, we shall look into the list of Payment Banks active in India. Before that, let us first understand what are payment banks and how are they different from regular banks.
What is Payment Banks?
A payment bank is a type of banking institution in India, designed primarily to enhance financial inclusion by making banking services accessible to all segments of society, especially those previously excluded from the banking system. They specialize in offering basic banking operations like savings accounts, payments, and remittance services targeting low-income individuals, small businesses, and others with limited banking needs.
What are the key features of Payments Banks in India?
Difference Between Payment Banks and Regular Banks
Unlike traditional banks, payment banks function under restricted parameters regulated by the Reserve Bank of India (RBI) under specific guidelines. Below, we have discussed key differences:
Payment Banks:
- Specialize in providing basic banking services such as savings accounts, payments, and remittances.
- Not permitted to open fixed or recurring deposits.
- Limited to accept deposits up to a maximum of 1 lakh rupees per customer.
- Not permitted to issue loans or credit cards.
- Offer interest rates on savings accounts comparable to those offered by regular banks.
Regular Banks:
- Offer a wide range of banking services including savings accounts, loans, credit cards, fixed deposits, recurring deposits, wealth management services, and more.
- Provide loans, credit cards, and other credit facilities to customers.
- No such limit on the deposit amount; customers can deposit any amount.
- Interest rates can vary widely depending on the type of account and deposit, including competitive rates for savings, fixed, and recurring deposits.
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List of Payment Banks active in India
India currently has 6 Payment Banks namely, Airtel Payment Bank, India Post Payment Bank, Fino, Paytm Payment Bank, NSDL Payment Bank and Jio Payment Bank.
Airtel Payments Bank
Headquarter: New Delhi
Awarded the first license by the RBI, Airtel Payments Bank commenced operations in September 2015, marking a significant milestone as India's inaugural payments bank. This venture saw a partnership between Bharti Airtel and Kotak Mahindra Bank, the latter holding a 19.9 percent stake. By 2019, Airtel expanded its offerings in collaboration with Bharti AXA General Insurance. The bank initiated its pilot services in Rajasthan in November 2016, adopting the motto ‘Banking Is Now at Your Fingertips - India’s First Payment Bank.’ With its headquarters in New Delhi, Airtel Payments Bank set a precedent in the payments banking sector.
Fino Payments Bank
Headquarter: Mumbai
Launching with over 400 branches and 25,000 banking points, Fino Payments Bank began its journey on 4 April, 2017. Originating as Fino Paytech Limited, a payment solution provider since 2006, it transitioned into a payments bank in 2017. Headquartered in Mumbai, the bank proudly carries the tagline ‘Qadar Aapki Mehnat Ki’.
List Of Banks In India
Indian Post Payments Bank (IPPB)
Headquarter: New Delhi
Operated by the Indian government and managed by the Ministry of Communications along with the Department of Posts, IPPB aims to leverage India’s vast network of 155,015 post offices for banking access. Launched on September 1, 2018, it garnered over 1.5 crore users by January 4, 2020, IPPB focuses on providing banking services to the doorstep with the help of postmen and Grameen Dak Sewaks. Operating under the philosophy ‘Aapka Bank Aapka Dwar,’ IPPB’s headquarters are situated in Delhi, underscoring its commitment to making banking accessible to all.
Jio Payments Bank
Headquarter: New Delhi
Jio Payments Bank Limited, a venture by Reliance, began its journey in November 2016. It aims to revolutionize India’s financial inclusion landscape. With the ambition to create an ecosystem for delivering straightforward, accessible, and cost-effective banking solutions, especially to the financially underserved, Jio Payments Bank aspires to digitize payments across the board. Headquartered in New Delhi, its operations are guided by the tagline ‘YOUR EVERYDAY BANK For all of your payments, banking, and financial needs’.
Paytm Payments Bank
Headquarter: New Delhi
Following the RBI’s approval in August 2015, Paytm Payments Bank launched in November 2017 as an entity distinct from its parent company, with founder Vijay Shekhar Sharma owning a 51% stake. Despite ambitious plans to establish over 100,000 banking access points by the end of 2018, the bank fell short of this goal by 2019. Based in Noida, Paytm is renowned for its comprehensive e-commerce payment system, operating under the tagline ‘Simplifying Payments for India.’
NSDL Payments Bank
Headquarter: Mumbai
As one of India's operational payment banks, National Securities Depository Limited (NSDL) Payments Bank commenced its services on 29 October, 2018. NSDL Payments Banks, a non-governmental organization, is classified as ‘a company limited by shares’. Its authorized capital exceeds $29 million (200 crores). With its base in Mumbai, Maharashtra, the bank’s tagline is ‘Technology Trust and Reach’.
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