Will Payments Bank Ecosystem Disrupt Banking Industry?

A Payment bank can maintain both a current and a savings account which includes issuing of banking instruments like ATM or debit cards, net banking & mobile banking. Currently, payment banks are restricted from offering loans or credit cards & investments in government securities. Deposits from NRIs are also not allowed at the moment. 

India is warming up to this new digital banking ecosystem called as “Payments Bank”. This is the brainchild of the RBI (Reserve Bank of India) that allows institutions that operate such banks to accept and restrict deposits beyond Rs. 1 Lakh with interest on the money being deposited by the customer using a mobile device.

Perhaps the biggest driving factor for payment banks is that they offer banking at your convenience. You can use your payments bank account from your home or elsewhere without visiting physical a bank whereas traditional banking is still heavily relies on you to visit a physical bank for most things. While the traditional banking system requires you to maintain a minimum of Rs 1000 as monthly balance, payment banks offer a Zero Balance Account where no minimum balance is required for operating such accounts. 

Security on such platforms is of uttermost importance and hence many payments banks employ many security layers & are considered safe for the most part. One of the key advantages of such accounts is that they are more consumer centric in many ways - you can simply use your mobile number as your account number. You also get to avail several offers at your disposal such as cash back and discounts once you register for such an account.

The Rate of interest on a payments bank account is way more than these traditional bank accounts, where the highest rate of interest being provided is up to 7.25 %.They arealso known for their easy KYC norms and minimal fees so open a payments bank account to compliment your savings account today!