{"id":19953,"date":"2024-02-01T05:02:07","date_gmt":"2024-01-31T23:32:07","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=19953"},"modified":"2025-04-05T21:03:31","modified_gmt":"2025-04-05T15:33:31","slug":"payments-bank","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/payments-bank\/","title":{"rendered":"What is a Payments Bank?"},"content":{"rendered":"<h2>About Payments Bank<\/h2>\n<ul>\n<li>A payments bank is like any other bank but\u00a0operates on a smaller scale\u00a0without involving any credit risk.\u00a0<\/li>\n<li>It was set up based on the\u00a0recommendations of the Nachiket Mor Committee.<\/li>\n<li>Objective: To advance financial inclusion by offering banking and financial services to the unbanked and underbanked areas, helping the migrant labour force, low-income households, small entrepreneurs, etc.<\/li>\n<li>It is\u00a0registeredas a public limited company\u00a0under the Companies Act 2013 and licensed under Section 22 of the Banking Regulation Act 1949.<\/li>\n<li>It is\u00a0governed by a host of legislation, such as the\u00a0Banking Regulation Act, 1949;\u00a0RBI Act, 1934; Foreign Exchange Management Act, 1999, etc.<\/li>\n<li>Features:\n<ul>\n<li>They are\u00a0differentiated, and not universal banks.<\/li>\n<li>These\u00a0operate on a smaller scale.<\/li>\n<li>The\u00a0minimum paid-up equity capital for payments banks shall be\u00a0Rs. 100 crores.<\/li>\n<li>The minimum initial contribution of the promoter to the Payment Bank to the paid-up equity capital shall be at least 40% for the first five years from the commencement of its business.<\/li>\n<\/ul>\n<\/li>\n<li>Activities that can be performed:\n<ul>\n<li>It can take\u00a0deposits up to Rs. 2,00,000. It can\u00a0accept demand deposits in the form of savings and current accounts.<\/li>\n<li>The\u00a0money received as deposits\u00a0can be invested in secure government securities\u00a0only in the form of Statutory Liquidity Ratio (SLR).\u00a0This must amount to 75%\u00a0of the demand deposit balance.<\/li>\n<li>The\u00a0remaining 25% is to be\u00a0placed as time deposits with other scheduled commercial banks.<\/li>\n<li>It\u00a0can offer remittance services, mobile payments\/transfers\/purchases, and other banking services like\u00a0ATM\/debit cards, net banking, and\u00a0third-party fund transfers.<\/li>\n<li>It\u00a0can become a banking correspondent (BC) of another bank for credit and other services which it cannot offer.<\/li>\n<\/ul>\n<\/li>\n<li>Activities that can be performed:\n<ul>\n<li>It\u00a0cannot issue loans and credit cards.<\/li>\n<li>It\u00a0cannot accept time deposits\u00a0or NRI deposits.<\/li>\n<li>It\u00a0cannot set up subsidiaries to undertake non-banking financial activities.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1) What is Statutory Liquidity Ratio (SLR)?<\/h3>\n<p>Statutory Liquidity Ratio or SLR is a minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold or other securities. It is basically the reserve requirement that banks are expected to keep before offering credit to customers. These are not reserved with the Reserve Bank of India (RBI), but with banks themselves. The SLR is fixed by the RBI.\u00a0<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/www.livemint.com\/economy\/rbi-bars-paytm-payments-bank-from-accepting-deposits-in-any-customer-account-from-next-month-11706700713798.html\" target=\"_blank\" rel=\"nofollow noopener\"><u>RBI bars Paytm Payments Bank from accepting deposits in any customer account from next month<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A payments bank is like any other bank but operates on a smaller scale without involving any credit risk. <\/p>\n","protected":false},"author":5,"featured_media":19954,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-19953","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/19953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=19953"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/19953\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/19954"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=19953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=19953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=19953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}