India, May 19 -- What Is A Payments Bank?

A payments bank operates like a leaner, digital-first version of a traditional bank, focussing specifically on facilitating payment transactions. They are also a unique regulatory innovation established by the Reserve Bank of India (RBI) to expand financial inclusion. As more Indians open a bank account, payments banks have gained popularity rapidly.

An end user can deposit up to INR 2 Lakh in their payments bank account. India currently has six active payments banks, including the beleaguered Paytm Payments Bank, Airtel Payment Bank, India Post Payment Bank, Fino Payment Bank, NSDL Payment Bank and Jio Payment Bank.

How Does A Payments Bank Work?

The following is a simple technical descriptio...