Aditya Birla Idea Payments Bank today became the fourth such entity to begin operations since issuance of licenses to 11 firms by RBI in August 2015. “Aditya Birla Idea Payments Bank Ltd has commenced operations as a payments bank with effect from February 22, 2018,” Reserve Bank said in a release.
Telecom major Bharti Airtel was the first to begin the payments bank operations in November 2016 and the Aditya Birla group-promoted firm is the latest to join the bandwagon.
Paytm founder Vijay Shekhar Sharma promoted Paytm Payments Bank started giving the differentiated banking services from May last year while FINO Payments Bank Limited has commenced operations in June 2017.
The Department of Posts, which also got a license for a payment bank is yet to start its services formally, but it is running some operations on a pilot basis.
Payments bank are being promoted by the Reserve Bank to further financial inclusion by giving services such as small savings accounts, payment or remittance services to migrant labour workforce, low income households, small businesses and unorganised sector entites as well as other users.
A payments bank is not allowed to give loans. It is authorised to accept demand deposits with a maximum balance of Rs 1 lakh per customer. It can issue debit cards but not credit cards. Besides, it can also act as a business correspondent to another bank.