Which are Some of the Operational Payments Banks in India?
March 27, 2018
Payments banks are the new-age lenders born out of a concept of the Reserve Bank of India (RBI). At present, these banks offer limited services such as deposits up to Rs. 1 lakh per customer, ATM cards, debit cards, etc. and they cannot offer loans.
The payments banking model was created to target the non-banking population, i.e. individuals with smaller banking requirements such as students, and young professionals. These banks offer lenient KYC norms and lower fees, apart from many other benefits for smaller credit requirements.
On August 2015, the RBI granted a license to launch a payments bank to 11 entities including Airtel M Commerce Services, Paytm, Tech Mahindra, etc. However, at present, there are only 4 operational payments banks-
- Paytm Payments Bank
- Airtel Payments Bank
- India Post Payments Bank
- Fino Payments Bank
The following aspects discuss how these banks stack up against each other:
– Debit Cards and ATM Transactions
Most of the payments banks have joined hands with traditional lenders to offer debit card service to their customers. For instance, Fino Payments Bank has ICICI Bank, and India Post Payments Bank has got public sector Punjab National Bank on board for the service.
The ATM charges of Payments Banks are comparable with the commercial banks.
– Interest Rates
The interest rates offered by the Payments Bank are better than the commercial banks in most cases. For instance, Airtel Payments Bank is offering 7.25% interest on savings deposits although most commercial banks only offer a rate of 4%. Similarly, the India Post Payments Bank is offering a 5.5% rate.
– Online Transfers
Online transfers from one Airtel Payments Bank account to another is free. However, for transferring funds to a different bank you have to pay a 0.5% fee if the amount if higher than Rs. 1,000.
India Post has assigned different charges for different transfers which are free. For instance, NEFT transfers attract a fee between Rs. 2.5 and Rs. 5.
Paytm Payments bank doesn’t charge anything for online transfers.