Payment Bank License

List of Small Banks and Payment Banks Approved by RBI

Payment Banks

In this article, We will discuss an updated list of Small & Payment banks in India.

What are Small Banks?

  • Small Finance Banks is a type of niche banks in India. Banks with a small finance bank license can provide basic banking service for acceptance of deposits & lending. They cater to deposits & loans particularly in small They are meant for the financial inclusion of small farmers, MSMEs, & the unorganized sector. If a license is allotted to MFI, NBFC than they can convert themselves into differentiated small banks.
  • The purpose of the small banks will be to provide a whole suite of basic banking products such as deposits & supply of credit but in a limited area of operation.
  • The objective for these Small Banks is to increase financial inclusion by the provision of savings vehicles to under-served & unserved sections of the population, the supply of credit to small farmers, micro & small industries, & other unorganized sector entities through high technology-low cost operations.
  • Resident individuals with 10 years of experience in banking & finance, companies & Societies will be eligible as promoters to set up small NFBCs, microfinance institutions (MFIs), & Local Area Banks (LABs) can convert their operations into those of a small bank. Local focus & ability to serve smaller customers will be a key criterion in licensing such banks.
  • In view of the concentration of area of operations, the Small Bank would need a diversified portfolio of loans, spread over it area of operations.
  • Small finance banks are a type of niche banks in India. Banks with a small finance bank license can provide basic banking service for acceptance of deposits & lending. The aim behind these to provide financial inclusion to sections of the economy not being served by other banks, such as small business units, small & marginal farmers, micro & small industries & unorganized sector entities
  • The objectives of setting up of small finance banks will be for furthering financial inclusion by the provision of savings vehicles primarily to unserved & undeserved sections of the population, &supply of credit to small business units; small & marginal farmers; micro & small industries; & other unorganized sector entities, through high technology-low cost operations. 
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List of Small Banks in India

  1. Au Financiers Ltd.

Their aim is to redefine banking & give their customers a convenient banking experience & no one is deprived of banking. This bank is based in Jaipur, four pillars on which it st&s is Inclusiveness, Progress for all, Simplicity, Action & Urgency.

  1. Capital Small Finance Bank

This bank started its operations on April 24, 2016, & is based in Jal&har isIndia’s 1st Small Finance Bank. It operated for 16 years as the largest local area bank before its conversion to Small Finance Bank.

  1. Disha

Disha Microfinance started in 2009 in Ahmedabad as NBFC MFI registered with the Reserve Bank of India & aimed to provide high-quality financial services. It has been recently granted license from the RBI in May-17 to form Fincare Small Finance Bank.

  1. Equitas

It is a new age bank that gives people across India a new & fun way to the bank. They are changing the way banking experienced with FUN being the key driver.

  1. ESAF

ESAF Microfinance will be now the first Small Finance Bank from Kerala which will provide responsive banking services to the underserved & un-served households in India.

  1. Janalakshmi

On 29 April 2017 Janalakshmi Financial Services (JFS), was announced the receipt of the license from Reserve Bank of India (RBI) to set up Small Finance Bank. The Small Finance Bank aims to empower the unbanked segments of the society with cashless transactions, savings account, & more.

  1. RGVN

RGVN, the only microfinance firm from the north-east to receive the license to set up a small finance bank. They intend to add 32 more branches by March next year. All branches will be operating as a full-fledged bank by fiscal 2018.

  1. Suryoday
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On 23 January 2017 Suryoday Micro Finance Private Ltd. started its operations as Suryoday Small Finance Bank. They will continue to offer their existing credit products & offer digital banking as well as focus on the unserved & undeserved through innovative banking practices.

  1. Ujjivan

In the year 2016, Ujjivan received the final license from the RBI to set up Small Finance Bank business. As on February 2017, they are present across 24 states.

  1. Utkarsh

Utkarsh Micro Finance Limited will now be known as Utkarsh Small Finance Bank which will provide financial awareness to support underserved & underprivileged segments of the population by sustainably providing financial & non-financial services.

What is Payment Banks?

  • Payments Banks it’s an original model of banks conceptualized by the Reserve Bank of India (RBI). These banks can accept a restricted deposit, which is currently limited to ₹1 lakh per customer & may be increased further. These banks cannot issue loans & credit cards.
  • Payment bank can accept deposits restricted to ₹ 1 lakh per customer, & are allowed to pay customers interest on the money that is being deposited. They can be used for either current accounts or savings accounts. The payment banks ATM or debit cards will also work on all banks’ machines.
  • Payment banks propose enhanced services compared to a digital wallet but are not in the same league as the traditional banks.
  • Payment Banks are smaller versions of traditional banks. Their objective is to reach low-income households & small businesses mainly through mobile phones rather than traditional offices. It is an initiative by the government to increase financial services penetration level to remote areas of India. Payment Banks can carry out most of the banking operations except for issuing credit cards & loan advances. The Reserve Bank of India (RBI) licensed eleven entities to launch payment banks.
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Payment Banks in India

  1. Aditya Birla Nuvo
  2. Airtel M Commerce Services
  3. Cholam&alam Distribution Services
  4. Department of Posts
  5. FINO Paytech
  6. National Securities Depository
  7. Paytm
  8. Reliance Industries
  9. Sun Pharmaceuticals
  10. Tech Mahindra
  11. Vodafone M-Pesa

Features of Payment Banks

  • Accept them & deposits up-to ₹ 1 lakh
  • Pay interest on the deposits
  • Issue debit cards/ATM cards that can be used on any bank’s ATM
  • Offer remittance services through mobile phones
  • Offer automatic payment of bills
  • Offer forex services to travelers
  • Transfer funds directly to bank accounts

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