So Payments Banks are a go: the RBI has granted "in-principle" approval to 11 applicants for payments banks, from 41 applications that it received: Reliance Industries Limited, Paytm, Sun Pharma founder Dilip Shantilal Shanghvi (who partnered with Telenor and IDFC), Fino Paytech, Aditya Birla Nuvo, Department of Posts, Cholamandalam Distribution services (a financial services co), National Securities Depository Limited, and Tech Mahindra, apart from telecom operators Airtel and Vodafone. The approval granted will be valid for 18 months, during which time the applicants have to comply with the requirements under the Payments Banks Guidelines. Following this, the RBI will consider granting a license for commencement of banking businesses "under Section 22(1) of the Banking Regulation Act, 1949. Until a regular licence is issued, the applicants cannot undertake any banking business." What Payments Banks can and cannot do Apart from this, : - Payments Banks need to have "Payments Bank" in its name to differentiate it from regular banks - Can handle cross-border remittances of personal transactions or onthe current account. - Offer remittance services through branches, ATMs, Business Correspondents and mobile banking. They can also become business correspondents of other banks. Requirements from a Payments Bank - Payments bank will be required to have at least 25% of physical access points including business correspondents in rural centres. - The minimum paid-up equity capital of the payments bank shall be Rs. 100 crore. - The payments bank shall be required to maintain a minimum capital adequacy ratio of 15% of its risk weighted assets (RWA) on…
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