19 November

Payment banks are a new model of banks which are like any other banks but it works on a small scale. They are expected to reach customers through mobile phones rather than the conventional bank methods. It works like most banks but it doesn’t give out loans and credit cards. Though, both current account and saving account are available. These banks accept only a restricted amount which right now is 1 Lakh.

ATM cards, debit cards, net-banking and mobile banking can be issued by payment banks. It offers mobile payments, transfers, services, purchases and other services. Airtel and Paytm are examples of this type of banks. Read on to know more about these banks to use it to the maximum.

Why are they created?

If these banks are like other banks but with some limited services, then why are they even there? The object of these payment banks is to widen financial services to small business, migrant labors, and low-income household in a secure technology-driven way. It is also to ensure that each citizen has a global bank account.

Another advantage of payment banks is that we can transfer money safely from vast distances even without the need of a card. These banks have made money transfer easier and safer. These banks


are also firming India’s first steps towards the cashless economy.

How much is interest rate on deposits?

Payment banks are unlike common banks that we know of and also the interests they provide on deposits is different. Take a look at the interest rates provided by different payment banks.

Paytm provides 4% interest on deposits while Airtel payment banks are offering 7.25% interests on deposits on saving accounts.

India Post payments bank is giving 5.5% on its deposits and Fino Payments Bank has kept the ratings on saving 4% which is same as Paytm.

Charges on withdrawal and deposits

Payment banks also charge on withdrawal and deposits. Different banks charges differently and it is essential to know the charges before you deposit money in these banks.

Airtel charges 0.5 % of the amount you transfer to other banks and 0.65% on cash withdrawal. Whereas Fino Payments Bank charges Rs.5/- on every Rs.1000/- on cash withdrawal and deposits. Fino payments Bank also gives two free transactions and the charges are applicable from the third transactions. And if you deposit or withdraw at any merchant outlet, then you would have to pay 0.6% of the transaction amount.

India post payments bank charges around Rs.5 to Rs.15 depending on the amount.

Debit cards?

Paytm payment bank gives Rupay debit cards whereas Airtel doesn’t provide any debit card now. Paytm has subscription cost of Rs.100/- and delivery charges. Fino payment bank provides two types of debit cards classic and platinum. They take issuance fee around Rs.99 to Rs.199 and an annual fee second year afterward onwards.

India post payments bank gives free debit cards but charges the maintenance fee of Rs.100/- which is even applicable to the second year.  And they charge Rs.100/- on add-ons or in cases of theft.

Even though Airtel doesn’t give a debit card but they do have 10 lakhs outlets across India. If you are a frequent traveler then ask for a forex card that will allow you to debit money when you are outside of India. They can offer forex services at charges lower than the banks.

Charges on ATM transactions

Payment banks tie up with other banks to offer ATM transactions. Fino payments have tied up with ICICI Bank while India Post Payment bank has tied up with Punjab National Bank.

You get 5 free transactions in a non-metro city while only 3 free transactions in the metropolitan city. After which they charge Rs.20. However, India Post payment bank doesn’t charge if you withdraw money at India Post payment bank ATM or at Punjab National Bank ATM.

Offers and discounts

Paytm offers cash back and discounts if you pay through Paytm payment bank account. Airtel also gives discounts on utility bills payment made through Airtel bank account.


Reserve Bank has granted approval to the following payment banks:

  • Aditya Birla Nuva Ltd
  • Airtel M commerce services Ltd
  • Cholamandalam distribution services Ltd
  • Department of posts
  • Fino PayTech Ltd
  • National Securities Depository Ltd
  • Reliance Industries Ltd
  • Dilip Shantilal Shanghvi
  • Vijay Shekhar Sharma
  • Tech Mahindra ltd
  • Vodafone m-pesa Ltd

About Skilling You

Skilling You, is a multi-product platform for Skill Development programs. We strive to educate the youth with our prime focus on rural India, equipping learners through our cost-effective, technology-driven, research-based and comprehensive ‘ Employability Skills Programs’. In this dynamic environment and competitive markets, this humble initiative is the first step towards our commitment of empowering the youth with Employability Skills, by creating a stimulating and interactive learning environment, encouraging participation and individual creativity. With an aspiration of changing the employment landscape in India, we at Skilling You take a pledge to drive a culture of continuous learning, knowledge sharing and process improvement. In recent years, competition has increased, and job opportunities have reduced. In this competitive world, it isn’t enough to have a degree; one must have something extra, something unique to give them an edge over others.


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