As a part of the financial inclusion plan RBI has decided to set up the payment banks which will help in enhancing the financial services in the country. It was reported that the payment banks will only accept demand deposits — current and savings bank deposits. The payment bank will not be providing any loan facilities.
Payments Banks are not expected to deal with sophisticated products. The main purpose of setting up the payments is the further financial inclusion. The payment banks would majorly be set up in the remote and unbanked areas. The payment banks will cater the migrant labours, low income household and other unorganized sector entities with the service of savings account and payment services. As per the rules and norms these banks will not be offering the term deposit facility.
It is to be ensured that the Payments Bank should widespread their network of access points particularly in remote areas, either through their own branch network, Business correspondents or through networks provided by others.