“Banking at the doorstep” this phrase became reality in the year 2015 with the start of Payment Banks in India. Bharti Airtel was the first company to start a live payment bank in India. It is called Airtel Payments bank.
Let’s dive deep to know everything about Payment Banks in India.
The main objective of introducing payment banks in India was to extend the horizon of financial services to common people, small businesses, migrant laborers & low-income households. Along with covering remote areas of the country and the unorganized sector in India who usually can’t avail of the benefits.
RBI got a total of 42 applications out of which 11 companies got the license to open Payment Banks in India.
Bharti Airtel was the first company to start a live payment bank in India and they started Airtel Payments bank nationwide in November 2016. Followed by Indian Postal Payment Bank.
Fino Payment Banks won the Digital Payments Award 2018-19 for providing outstanding performance in its domain.
Out of these 11, only 6 are currently working. Keep reading to know the details that I will cover in a later section.
Before that let’s understand what payment bank is and what services you can get from a payment bank.
What is a Payment Bank
A payment bank is totally a new concept in the banking sector regulated by the Reserve Bank of India (RBI). A payment bank is similar to a normal bank but provides limited banking services as compared to traditional banks.
Services offered by Payment Banks in India
Payment banks are restricted to offer only a bunch of services. These services are:
- You can open a Savings account or a current account in payment banks.
- Payment bank also pays interest on deposited money just like traditional banks.
- Payment banks can issue debit/ATM cards to the customers.
- You can access payment banks services through Mobile banking.
- A payment bank can accept deposits up to Rs.1 lakh only per individual.
- You can use a payment bank app to transfer money and make utility bill payments as well.
- Payment banks provide internet banking services including payment transfer services such as RTGS/NEFT/IMPS.
- Payment banks can transfer payments through any channels like Branches, ATMs, mobile apps, or business correspondents.
- A payment bank also provides other financial services like mutual funds, insurance products, pension products, and forex services.
Services that Payment banks don’t provide
- Payment banks can’t provide loans to their customers
- Similarly, Payment banks can’t issue credit cards to their customers.
- NRIs can’t deposit in Payment banks.
Comparison of Payment banks, Prepaid Instruments (PPI), and Commercial banks
SystemCan give loans?Can accept deposits?Can make payments?Can offer interest on deposits?
Commercial Banks (SBI, PNB)YesYesYesYes
Payment BanksNoYesYesYes
Pre-Paid InstrumentsNoYesYesNo
Payment Network Operator (Visa, MasterCard)NoNoYesNo
List of Best Payment Banks in India
Here is the list of 11 applicants who got approval from RBI to open a payment bank in India.
- Airtel M Commerce Services Limited
- Aditya Birla Nuvo Limited (Idea Cellular)
- Fino PayTech Limited
- Reliance Industries
- National Securities Depository Limited (NSDL)
- Department of Posts (India Post)
- PayTM
- Cholamandalam Distribution Services Limited
- Sun Pharma
- Tech Mahindra Limited
- Vodafone M-Pesa Limited
Out of these 11 Payment Bank licensee’s 3 surrendered their license to RBI. Those are-
- Sun Pharma
- Tech Mahindra
- Cholamandalam distribution services
Aditya Birla Ltd. discontinued its payment bank operations from 26 July 2019. Vodafone M-Pesa Ltd didn’t start its payment bank owing to complications.
So, out of 11, the actual 6 operating payment banks are –
Best Payment Banks in India 2023
#1. Airtel Payment Bank
Airtel took the credit to start India’s first payment bank in November 2016. Initially, Airtel offered an amazing interest rate of 7.2% on savings accounts along with 0.65% charges on withdrawal of amount more than Rs. 4,000. But now Airtel has reduced the interest rate to 4%. Airtel has wide coverage with more than 5 lakh banking points in India.
Let’s look at other benefits offered by Airtel Payment Banks –
- Earn a 4.0% rate of interest
- Get an online debit card
- Transfer money to any bank account in India through IMPS or UPI
- Get free personal accident insurance cover of Rs 1 Lac
- Deposit cash at any nearest Airtel Banking Point
- Withdraw cash through Airtel banking points or select bank ATMs
- You can buy third party insurance products
- Recharge prepaid mobiles/DTH and pay utility bills (electricity, water, gas, postpaid, etc.)
- You can also book bus and train tickets
#2. Indian Post Payments Bank
Indian Post Payments Bank (IPPB) was the second live payments bank in India. Since IPPB was covered by post offices in India, they have a huge network with 1.55 lakhs post offices and 3 lakh plus employees to provide doorstep banking services. IPPB offers ‘Banking at doorstep’ with the help of its big employee network.
IPPB also has more than 2 lakh dedicated doorstep service providers to offer banking services at your home.
Benefits of IPPB’s Doorstep Banking
- You can experience seamless, digital and convenient account opening at your doorstep.
- Enjoy safe and secure cash transactions at your doorstep along with 24X7 fund transfer facility using IPPB app.
- Instant mobile and DTH recharge, water and electricity bill payments.
- You can now access your Aadhaar linked accounts held with other banks. You can opt the below services:
Cash Withdrawal
Balance Enquiry
Mini Statement - You can also enjoy Third-party Services like Insurance, Loans, and Investments.
#3. Fino Payments bank
Fino Payments bank started its services with 410 branches and 25000 banking points in India. Fino Payments bank has an excellent record of providing excellent services and winning multiple awards for their hard work. Fino Payment Banks won the Digital Payments Award 2018-19, ETBFSI Excellence Award and Champion of Rural Market Award for providing outstanding performance in its domain.
Benefits of Fino Payments Bank are-
- You can experience seamless money transfers, shopping and withdrawals.
- Sweep in and Sweep out facility to earn more interest up to 7.2%.
- Enjoy safe and secure cash transactions using Fino payments app.
- Instant mobile and DTH recharge, water and electricity bill payments.
- 10% cashback on shopping at vishal mega mart.
- 10% discount on shopping at big bazaar.
- Offers from MMT, Bata and Bookmyshow.
#4. Paytm Payments Bank
With Paytm savings account, your phone is your bank. You can enjoy the convenience of banking from your phone. Paytm payments bank offer cashless payments transaction and provide minimal banking needs to the unbanked sections of society.
Benefits of Paytm Payments Bank-
- You can open zero balance savings account with no worry to maintain monthly average balance.
- Account opening is simple and completely digital via the paytm app. But you need to submit documents to complete your KYC at the nearby Paytm point or you can avail this facility during ride because Paytm has colaborated with Ola, Uber to complete KYC through their drivers.
- No charges on online fund transfers done via IMPS, UPI or NEFT to another Paytm bank account or Paytm wallet.
- 4% charges on money transfers from wallet to a bank account.
#5. Jio Payments Bank
Jio Payments Bank has restricted services as payments bank. Jio Payments Bank Digital Savings Account is a paperless, fast, convenient and secure. These are the benefits –
- Your account limit is from Rs. 1 lakh
- Earn interest of 4% on your account balance.
- You can use your Jio Payments Bank account for all your digital banking needs like instant money transfers, paying bills, recharges, online payments and much more.
- You can even get your free monthly statements, offers and SMS alerts.
- It is easy to view your transaction history directly from your MyJio app.
NSDL Payments Bank
Yet to start its operations. They have started the registeration for account opening in NSDL Payments Bank.