RBI’S Prior Approval Required for Payment Banks (Download PDF)


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All the entities granted a payments bank (PB) license should first take specific approval for the products which they intent to provide to customers. RBI also recently issued separate operating guidelines for payments banks based on financial inclusion.

Terms of This Guideline

  • Employee of Payment Bank should have to appoint sufficient number of Employees and put them at the specific distance so they can attend customers.
  • At un-banked rural areas there will be must at least have 25% of access points.
  • PB must have to offer remittance services.
  • They will be not allowed to lend.
  • Payment Banks are also allowed to offer simple financial products like insurance and mutual funds.
  • The RBI has authority to put suitable restrictions on the design, functioning, or other features of the product of Payment Banks.
  • RBI also has authority to discontinue the product which is launched by Payment banks if the product is not suitable for customers.
  • RBI will not object if Payments banks will make arrangements with other scheduled commercial bank or small finance bank.


  • Previously in August 2015, RBI granted in-principle licenses to 11 payments banks.
  • 3 Payment Banks were dropped from those 11, and rest have to start operations within 18 months of receiving in-principle approval.

About RBI

  • RBI stands for Reserve Bank of India.
  • It is central banking organization in India.
  • It controls the financial policy of the Indian rupee.
  • Founded on 1st April 1935 during the British Rule.
  • Nationalized on 1st January 1949.
  • Four local headquarters are at Mumbai, Kolkata, Chennai, and New Delhi.
  • It is a leading member of the Alliance for Financial Inclusion.

- Published/Last Modified on: October 10, 2016


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