The concept of payment banks in the country was first coined by the Reserve Bank of India. The main aim of making payment banks is to support the families that have lower income. The RBI has also set some guidelines for the payment banks.
Aim of a payment bank
The primary aim of the payment bank is to provide low unit credits to families having a low income. Precisely, small entrepreneurs and labourers get banking support from the payment banks. These banks neither get involved in credit risk nor they can issue credit cards for the customers or sanction loans to them.
Normally, operations like mobile banking, fund transfer, teller services take place in the Indian payment banks. Moreover, people get the opportunity to transact money through the debit card.
Objective
The primary objective of a payment bank is to help a person open a savings bank account. It also promotes awareness among rural people regarding the benefits of banking services. The small business organizations can save a part of the money and enjoy interest on it through a payment bank.
Moreover, the payment banks are a boon to the migrant labourers. They can easily send money to their families settled in rural India, even if they work in the city and vice versa.
Another objective of the payment bank is to provide zero-balance and fine-free savings books to the customers. Generally, this type of savings book is not available in normal banks
Payment bank branches are present in the remotest villages of India. So, people never feel neglected and can enjoy all ground-level banking conveniences provided by the government. Nowadays, rural people can avoid travelling to towns for banking purposes.
The number of payment banks in India has already reached to a decent benchmark and it is expected to develop more in future.