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Regulations
Payments banks are given the status of scheduled Banks under the section 42(6) (a) of the Reserve Bank of India Act 1934.However,”Payments Bank ” words have to be used by the companies in their name in order to differentiate it from other banks.
- Payments banks are licensed under section 22 of the banking Regulation Act 1949.Further, it is subjected to
- Banking Regulation Act 1949
- Reserve Bank of India Act 1934
- Payment & settlement system Act,2007
- Foreign Exchange Mangement Act 1999
- Deposit Insurance & credit guarantee corporation Act 1961
other conditions include the operation of the bank should be fully networked & technology driven from the beginning conforming to generally accepted standards & norms.The banks should have high powered customer grievances cell to handle customer complaints.
Capital Requirement
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Minimum Paid-up capital
The minimum paid up equity capital for payments bank shall be Rs 100 crore.A payments bank should have a leverage ratio of not less than 3% i.e its outside liabilities should not exceed 33.33 times of its net worth( paid-up capital and reserves ).
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Promoter`s contribution
The Promoter`s minimum initial contribution to the paid up equity capital of such payments bank shall at least be 40% for the first 5 years from the commencement of its business.
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Foreign Shareholding
The foreign shareholding in the payments bank would be as per the FDI Policy for the Private sector banks as amended from time to time.
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