Payment Bank License in India

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The Payment Bank License is a required condition for the opening of an Indian Payment Bank. The applicant must first raise 100 Crores of paid-up capital before applying for the license and then establish a Public Limited Company under the Companies Act, 2013.

What we provide Inclusions:-

  • Advice and Consultation on Payments Bank Business Model
  • Throughout Assistance
  • Payments Bank License Compliance Planning
  • Build a Business Strategy Special
  • Product and Complete Research of market

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What is the Payment Bank License?

The Indian economic structure has been fully reframed by demonetization. People are depending more on paperless transactions nowadays and tend to use digital payment portals. It has given a sudden boost to earlier outcast e-wallets or mobile wallets. Payment banks are the main niche of such online gateways. One needs to acquire a payment bank license to start any payment gateway.

Payment Bank is approved by the Reserve Bank of India (RBI). The maximum amount of money currently reserved for these types of Banks is INR 1 lakh per client which will be continuously upgraded. Both current and savings accounts can be operated under this Bank.

Payment banks shall be licensed under the Companies Act, 2013 as a public limited company. And accredited under Section 22 of the Banking Regulation Act, 1949, subject to certain licenses to regulate their operations, in particular with regard to the reception of payments necessary and the provision of services.

They can provide a service that links to bank cards, online banking, and ATM cards Payment Bank is also known as a split Bank will be allowed to set up shops (branches), ATMs, business books, etc. However, it will be limited to the activities authorized by the Bank under the Banking Regulation Act, 1949. The minimum amount paid by the bank to pay will be one hundred thousand. These payment banks are licensed and certified under a regulatory body.

Legalraasta will simplify your licensing process by providing services in Delhi NCR, Gujarat, Mumbai, Bengaluru, Chennai, and all other cities in India.

An Overview of Payments Banks

Payments Bank refers to a new bank model that the Reserve Bank of India (RBI) conceptualized in 2014. Such banks may accept a limited deposit of up to a maximum limit of approximately 100,000 per customer, which is further increased. While payment banks are a recent addition to the banking industry, the issuing of loans and credit card facilities is not advantageous. While payment banks provide a range of other services, such as debit cards, ATM cards, mobile banking, net banking, etc. In addition, a bank can run both current and saving accounts by acquiring payment banking licenses.

Under the Banking Regulation Act, 1949, the payment bank or differentiated bank is allowed to build new outlets such as Automated Teller Machines (ATMs), Business Correspondents (BCs), but banks do not start operations. It should also be 100 crores or more of the minimum paid-up capital of the payment bank.

Objective to give Payment Banks License

The core objective of the Payments Bank is to expand payments and financial services in a stable, technology-driven environment to all low-income households, small businesses, and migrant workers. The Reserve Bank of India aims to penetrate financial support through the support of payment banks in all remote areas of India. With a secure payment gateway for all transactions, it aims to redefine the Indian economy.

Eligibility to get Payment Bank License

As a minimum pay-up capital of 100 crores is required, the Reserve Bank of India has laid down a long list of qualified players for the Payment Bank license. Let’s take a sneak peek at the qualifying promoters who can execute the licensing procedure for the Payment Bank:

Governing Authorities that Governs Payments Bank

Under these government bodies/laws, a Payment Bank must be registered:

And other relevant rules and laws that can occur from time to time.

Benefits of Obtaining Payments Bank License

Offers Up to 1 Lakh Deposit

Only deposits up to a maximum of 1 lakh can be approved by the payment banks. The clients have to comply with the designated limit, and at any point in time, no one can pass that limit. One may choose to completely or partially deposit a number. RBI has set that end in order to protect the interest of the consumer and in terms of the almost new existence of such banks.

Facility for Virtual Debit Cards

The payment bank, which provides both physical and virtual debit cards, is another unique feature. The debit cards give users the benefit of using all ATMs at domestic borders, including abroad. There are no additional cash withdrawal charges required on virtual debit cards. The actual debit cards are often accompanied only by an annual fee.

Smooth Transactions via an online portal

Payment banks streamline the process of making and getting money across digital channels, unlike conventional banks. It allows clients to move online funds to providers such as NIFT, IMPS, and many others.

Feasible Banking Payment Mode

Given where you live, since it operates digitally, you can easily obtain the services of payment banks. Payments Banks minimize the need to visit a physical bank in order to deposit or withdraw money. By simply succeeding in a payment bank license, anyone can start a payments bank business online without needing a physical outlet.

Capital Requirements to get License

In India, the Capital Requirements to get a Payment Bank License are:

Scope of Payment Bank Operations in India

The scope of the functions of the Payment Bank in India can be summarized as:

Payment Bank License Documents Required

Documents Required On The Individual Promoter:-

  • Promoter’s name, residence status, date of birth, PAN No., parents’ names, branch, bank account details, and credit bureaux.
  • Complete and detailed information on the experience and background of each promoter, business, and financial track record, his expertise, details of the direct and indirect interests of the promoter in several organizations or industries or companies, etc.

Documents Required On The Business Promoting The Bank:-

MoA and AoA, Shareholding pattern of the promoter entity, organizational stocks pattern, development finance financial statements for the past 5 years (Include important economic indicators), and income tax returns for the past 3 years.

Documents Required On The Entities And Individuals In The Promoter Group:-

  • The names of individuals and organizations, executives, and business structures of all businesses, share details, pictogram organogram representing the structure, shares, and the total assets of the entities.
  • Submit annual reports for the past 5 years for all group organizations.

The names of all the businesses and individuals in the promotional group (including non-financial, financial, and overseas businesses) with the details listed below:

  1. Incorporation Date
  2. The activity of the business
  3. Registered Office address,
  4. PAN, TAN & CIN Number
  5. Account number
  6. Income Taxation to which the business belongs,
  7. Branch and its business account detail
  8. Credit and business services managers (registration details in cases controlled by SEBI)
  9. List details (in stock sales) for businesses

Procedure of Payment Bank License

Now that you have a good look at payment banks, you should be interested in setting them up. Therefore follow these steps to obtain a payment bank license:

Authorized Compliance of Payment Banks in India

Required Compliance Bank Payments in India can be summarized as:

Looking to the Future Payment Banks

Before getting into trouble with the documentation and the broader licensing banking system, it is important to determine the position of payment banks in the coming years.

Recent Update: – RBI Sets Guidelines for Licensing of SFB (Small Banks)

At present, Payments Banks intend to convert to SFBs (small financial banks) can only apply for such a license after five years of operation. In practice, existing banks (PBs), which have completed five years of service and are citizen-controlled, are also eligible to be transformed into SFBs (small financial banks) after complying with all regulatory and legal requirements of various authorities and guidelines.

According to the RBI, the minimum wage for SFBs was ordered at ₹ 200 Crore. In contrast, certain regulations will be amended to further strengthen the role of UCBs in promoting investment and reducing the risk of harassment in co-operative banking (urban) presentations. In addition, it has decided to bring in UCBs with assets of ₹ 500 Cr. and more, under the CRILC reporting framework (“Central Credit Information Center”).

Why LegalRaasta?

Legalraasta is one of the channels that coordinates and links you to consistent practitioners to fulfill both your legal and financial requirements. Yeah, with our legal service, our customers are delighted. They have consistently regarded us highly and given frequent updates because of our emphasis on simplifying legal requirements.
Our clients can also keep track of the progress on our website at all times. Our professional representatives are just a phone call away if you have any concerns about the Payment Bank License process. Legalraasta can guarantee that it is charming and smooth for your contact with professionals.

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Frequently Asked Questions

A bank of payments is like any other bank but operates on a smaller scale without any credit risk involved. It can carry out most banking operations in plain words, but can not advance loans or issue credit cards.

Payment Bank License can be easily applied online. But you will need a professional to create the application process. For more extra, call us on 8750008881.

Payment Bank License can be easily applied online at minimal prices with Legalraasta. But you will need a professional to create the application process. For extra, further details call us on 8750008881.

Incorporate a Public Limited Company under the Companies Act, 2013, as per RBI directions. File an application to the Chief General Manager of RBI for a Payment Bank license. Then the examination conducts the application and Once the examiner gets fully satisfied, and there is no scope of verification will be done. After that license is issued.

To receive the Payment License Application, several documents and data need to be given. For a better understanding, please refer to the above context to learn in-depth.

The Reserve Bank of India grants the Payment Bank License to the claimant, under section 22 of the Banking Regulation Act, 1949.

The minimum required pay-up equity capital for opening a payment bank and obtaining a Payment Bank License is Rs. 100 Cr, according to the RBI guidelines.

Yeah, existing and saving deposits of up to Rs 1 lakh per client can be approved by a payment bank.

Oh, no. In the Payment Banks, NRIs are not allowed to make any deposits.


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