What is Cryptocurrency A new word emerged in our lives two months after the beginning of the recession of 2008 and gradually transformed from a vague expression ("virtual coin") to the vocabulary used to characterize the new economy. On June 9, 2009 the first bitcoin was released by an anonymous person called Satoshi Nakamoto. For different reasons like the sub-prime crisis, Nakamoto, claimed he is a Japanese man in his 30's, said he gave the open protocol in 2007. Today the new coin is called a "Digital Asset" and decentralization is the principal idea behind it: there's no main institution responsible for regulating it. The most familiar and traded form of Blockchain's technology, Bitcoin, who has crossed the $15,000 lines way back and has shows an image of exponential increase in the past few months. The great advantage of blockchain technology is that it doesn't have to keep records for a large central computer or big managing company. With this ...
What is Payments Bank
Like any other bank, a payment bank operates on a smaller scale without credit. Simply put, it can do most of the banking operations but can not advance loans or issue credit cards. It can accept deposits of demand (up to ₹1 lakh), offer remittance services, mobile payments / transfers / purchases and other banking services such as ATM / debit cards, net banking and transfer of funds from third parties.
In September 2013, the Reserve Bank of India set up a committee headed by Dr. Nachiket Mor to review "Micro and low-income finance services." The committee planned to recommend financial inclusion initiatives and improved access to financial services.
In January 2014, the Committee presented its report to RBI. One of the Committee 's main suggestions was to establish the specialized banks or "payment banks" to accommodate the small income groups and small firms, so that each Indian citizen could have a global bank account by 1 January 2016.
Why Payments Bank ?
Payments bank's main objective is to expand payments and financing services in a secure technology-driven environment to include small, low-income households and migrant workers.
RBI aims at increasing the degree of penetration in the remote areas of the country with payment banks.
Market Share
In 2018, over 88 per cent of the deposits at payment banks were mainly held by Paytm Payments Bank and Airtel Payments Bank of seven payment banks.
Paytm saw an increase in ₹371.4 crore (48 percent of the total deposit) of ₹107.3 crore in March in over 240 percent in December 2019, according to the RBI data.
Airtel Payments Bank has seen a 10 % increase deposits to ₹320 crore (41% of the total).
Payment banks, including savings and current accounts, kept about Rs.780 crore of, deposits until last year. This is 78% higher than the ₹438.22 crore figure of March.
Post Payments Bank, government-supported, also saw ₹33.6 crore deposit.
The negative growth in deposit in ₹29.41 of ₹39.23 crore has occurred with Fino Payments Banks. Jio Payments Banks received a deposit of ₹17,82 in December 2018. The March 2018 deposit figure was not available for Jio, Aditya Birla and NSDL Payments Banks.
Some of the payment banks have noticed an increase mainly because of their network use and market awareness.
For violation of operational guidelines and Knowing Your Customer Standards, RBI imposed a penalty of ₹5 crore against Airtel Payments Bank. Paytm was also stopped for its faulty process of adding clients. The Fino Payment Bank was also subject to fine by RBI, which found that deposits exceeding ₹1 lakh are collected.
Future of Payments Bank
The regulations introduced have caused deposits and new accounts to slow down. The Central Bank currently imposes a cap on ₹1 lakh deposits per customer in payment banks and is not allowed to lend directly to the banks.
In 2019, the total transaction volume of UPI transactions from all payment banks was Rupees 499 million, reflecting 70% of all transactions, with a total transaction value of ₹57219 crore. At 18.6 percent, E wallets were settled, indicating clearly a new trend.
In order to accelerate the penetration of financial services, payment banks were introduced in India. However, they are still uncertain regarding large-scale usage and profitability. They rely largely on transaction fee revenue. This alone cannot make them successful, and they need to increase the transaction volumes.
Aditya Birla Idea Payment Bank (ABIPBL) decided, 18 months after launch in July 2019, to shut down operations. It claimed that it was being conducted because of "unexpected changes," which made the business model unsustainable.
In India, payment banks are facing small revenue sources and high infrastructure costs.
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