MANY NEWS ARE COMING ABOUT PAYMENT BANK LICENSE TO DOP, SO WE MUST KNOW WHAT WILL HAPPEN WHEN DOP WILL GET IT .HERE IS THIS INFO
The Payments Bank will be set up
as a differentiated bank and shall confine its activities to further the
objectives for which it is set up. Therefore, the Payments Bank would
be permitted to undertake only certain restricted activities permitted
to banks under the Banking Regulation Act, 1949, as given below:
Acceptance of demand deposits,
i.e., current deposits, and savings bank deposits. The eligible deposits
mobilised by the Payments Bank would be covered under the deposit
insurance scheme of the Deposit Insurance and Credit Guarantee
Corporation of India (DICGC). Given that their primary role is to
provide payments and remittance services and demand deposit products to
small businesses and low-income households, Payments Banks will
initially be restricted to holding a maximum balance of Rs. 100,000 per
customer. After the performance of the Payments Bank is gauged by the
RBI, the maximum balance can be raised. If the transactions in the
accounts conform to the “small accounts”1 transactions, simplified
KYC/AML/CFT norms will be applicable to such accounts as defined under
the Rules framed under the Prevention of Money-laundering Act, 2002.
Payments and remittance services through
various channels including branches, BCs and mobile banking. The
payments / remittance services would include acceptance of funds at one
end through various channels including branches and BCs and payments of
cash at the other end, through branches, BCs, and Automated Teller
Machines (ATMs). Cash-out can also be permitted at Point-of-Sale
terminal locations as per extant instructions issued under the PSS Act.
In the case of walk-in customers, the bank should follow the extant KYC
guidelines issued by the RBI.
Issuance of PPIs as per instructions issued from time to time under the PSS Act.
Internet banking - The RBI is also open
to applicants transacting primarily using the Internet. The Payments
Bank is expected to leverage technology to offer low cost banking
solutions. Such a bank should ensure that it has all enabling systems in
place including business partners, third party service providers and
risk managements systems and controls to enable offering transactional
services on the internet. While offering such services, the Payments
Bank will be required to comply with RBI instructions on information
security, electronic banking, technology risk management and cyber
frauds.
Functioning as Business Correspondent
(BC) of other banks – A Payments Bank may choose to become a BC of
another bank for credit and other services which it cannot offer.
The Payments Bank cannot set up
subsidiaries to undertake non-banking financial services activities. The
other financial and non-financial services activities of the promoters,
if any, should be kept distinctly ring-fenced and not comingled with
the banking and financial services business of the Payments Bank.
The Payments Bank will be required to use the word “Payments” in its name in order to differentiate it from other banks.
DEPLOYMENT OF FUNDS
The Payments Bank cannot undertake
lending activities. Apart from amounts maintained as Cash Reserve Ratio
(CRR) with RBI, minimum cash in hand and balances with a scheduled
commercial bank/RBI required for operational activities and liquidity
management, it will be required to invest all its monies in Government
securities/Treasury Bills with maturity up to one year that are
recognized by RBI as eligible securities for maintenance of Statutory
Liquidity Ratio (SLR). The Payments Bank will participate in the payment
and settlement system and will have access to the inter-bank
uncollateralised call money market and the collateralised CBLO market
for purposes of temporary liquidity management.
CAPITAL REQUIREMENT
Since the Payments Bank will not be
allowed to assume any credit risk, and if its investments are held to
maturity, such investments need not be marked to market and there may
not be any need for capital for market risk. However, the Payments Bank
will be exposed to operational risk. The Payments Bank will also be
required to invest heavily in technological infrastructure for its
operations. The capital will be utilised for creation of such fixed
assets. Therefore, the minimum paid up voting equity capital of the
Payments Bank shall be Rs. 100 crore. Any additional voting equity
capital to be brought in will depend on the business plan of the
promoters. Further, the Payments Bank should have a net worth of Rs 100
crore at all times. The Payments Bank shall be required to maintain a
minimum capital adequacy ratio of 15 per cent of its risk weighted
assets (RWA) on a continuous basis, subject to any higher percentage as
may be prescribed by RBI from time to time. However, as Payments Banks
are not expected to deal with sophisticated products, the capital
adequacy ratio will be computed under simplified Basel I standards.
As the Payments Bank will have almost
zero or negligible risk weighted assets, its compliance with a minimum
capital adequacy ratio of 15 per cent would not reflect the true risk.
Therefore, as a backstop measure, the Payments Bank should have a
leverage ratio of not less than 5 per cent, i.e., its outside
liabilities should not exceed 20 times its net-worth / paid-up capital
and reserves.
PROMOTER’S CONTRIBUTION
The promoter’s minimum initial
contribution to the paid up voting equity capital of Payments Bank shall
be at least 40 per cent which shall be locked in for a period of five
years from the date of commencement of business of the bank.
Shareholding by promoters in the bank in excess of 40 per cent shall be
brought down to 40 per cent within three years from the date of
commencement of business of the bank. Further, the promoter’s stake
should be brought down to 30 per cent of the paid-up voting equity
capital of the bank within a period of 10 years, and to 26 per cent
within 12 years from the date of commencement of business of the bank.
Proposals having diversified shareholding and a time frame for listing
will be preferred.
FOREIGN SHAREHOLDING
The foreign shareholding in the bank would be as per the extant FDI policy.
Voting Rights And Transfer/Acquisition Of Shares
As per Section 12 (2) of the Banking
Regulation Act, 1949, the voting rights in private sector banks are
capped at 10 per cent, which can be raised to 26 per cent in a phased
manner by the RBI. Further, as per Section 12B of the Act ibid, any
acquisition of 5 per cent or more of voting equity shares in a private
sector bank will require prior approval of RBI. This will also apply to
the Payments Banks.
PRUDENTIAL NORMS
As the Payments Bank will not have loans
and advances in its portfolio, it will not be exposed to credit risk
and, the prudential norms and regulations of RBI as applicable to loans
and advances, will therefore, not apply to it. However, the Payments
Bank will be exposed to operational risk and should establish a robust
operational risk management system. Further, it may face liquidity risk,
and therefore is required to follow RBI’s guidelines on liquidity risk
management, to the extent applicable.
BUSINESS PLAN
The applicants for Payments Bank
licences will be required to furnish their business plans and project
reports with their applications. The business plan will have to address
how the bank proposes to achieve the objectives of setting up of
Payments Banks. The business plan submitted by the applicant should be
realistic and viable. Preference will be given to those applicants who
propose to set up Payments Banks with access points primarily in the
under-banked States / districts in the North-East, East and Central
regions of the country. However, to be effective, the Payments Bank
should ensure widespread network of access points particularly to remote
areas, either through their own branch network or BCs or through
networks provided by others. The bank is expected to adapt technological
solutions to lower costs and extend its network. In case of deviation
from the stated business plan after issue of licence, RBI may consider
restricting the bank’s expansion, effecting change in management and
imposing other penal measures as may be necessary.
CORPORATE GOVERNANCE
The Board of the Payments Bank should have a majority of independent Directors.
The bank should comply with the
corporate governance guidelines including ‘fit and proper’ criteria for
Directors as issued by RBI from time to time.
SOURCE :RBI
https://rbi.org.in/scripts/bs_viewcontent.aspx?Id=2857
Thanks to Ashutosh Kumar Kaushahttps://rbi.org.in/scripts/bs_viewcontent.aspx?Id=2857
