Prime Minister

Shri Narendra Modi

Personnel, Public Grievances and

Pensions
Department of Atomic Energy
Department of Space
All important policy issues and
All other portfolios not allocated to any
Minister

Cabinet Ministers
1

Shri Raj Nath Singh

Home Affairs

Smt. Sushma Swaraj

External Affairs
Overseas Indian Affairs

Shri Arun Jaitley

Finance
Corporate Affairs
Information & Broadcasting

Shri M. Venkaiah Naidu

Urban Development
Housing and Urban Poverty Alleviation
Parliamentary Affairs

Shri Nitin Jairam Gadkari

Road Transport and Highways

Shipping

Shri Manohar Parrikar

Defence

Shri Suresh Prabhu

Railways

Shri D. V. Sadananda
Gowda

Law & Justice

Sushri Uma Bharati

Water Resources, River Development and

Ganga Rejuvenation
1
0

Dr. Najma A. Heptulla

Minority Affairs

1
1

Shri Ramvilas Paswan

Consumer Affairs, Food and Public

Distribution

1
2

Shri Kalraj Mishra

Micro, Small and Medium Enterprises

1
3

Smt. Maneka Sanjay

Gandhi

Women and Child Development

1
4

Shri Ananthkumar

Chemicals and Fertilizers

1
5

Shri Ravi Shankar Prasad

Communications and Information

Technology

1
6

Shri Jagat Prakash Nadda

Health and Family Welfare

1
7

Shri Ashok Gajapathi Raju

Pusapati

Civil Aviation

1
8

Shri Anant Geete

Heavy Industries and Public Enterprises

1
9

Smt. Harsimrat Kaur

Badal

Food Processing Industries

2
0

Shri Narendra Singh

Tomar

Mines
Steel

2
1

Shri Chaudhary Birender

Singh

Rural Development
Panchayati Raj

Drinking Water and Sanitation

2
2

Shri Jual Oram

Tribal Affairs

2
3

Shri Radha Mohan Singh

Agriculture

2
4

Shri Thaawar Chand

Gehlot

Social Justice and Empowerment

2
5

Smt. Smriti Zubin Irani

Human Resource Development

Dr. Harsh Vardhan

Science and Technology

Earth Sciences

2
6

Ministers of State (Independent Charge)

General V. K. Singh

Statistics and Programme

Implementation (Independent Charge)
External Affairs
Overseas Indian Affairs

Shri Inderjit Singh Rao

Planning (Independent Charge)

Defence

Shri Santosh Kumar

Gangwar

Textiles (Independent Charge)

Shri Bandaru Dattatreya

Labour and Employment (Independent

Charge)

Shri Rajiv Pratap Rudy

Skill Development & Entrepreneurship

(Independent Charge)
Parliamentary Affairs

1
0

1
1
1
2

1
3

Shri Shripad Yesso Naik

AAYUSH (Independent Charge)

Health & Family Welfare

Shri Dharmendra Pradhan

Petroleum and Natural Gas (Independent

Charge)

Shri Sarbananda Sonowal

Youth Affairs and Sports (Independent

Charge)

Shri Prakash Javadekar

Environment, Forest and Climate Change

(Independent Charge)

Shri Piyush Goyal

Power (Independent Charge)

Coal (Independent Charge)
New and Renewable Energy
(Independent Charge)

Dr. Jitendra Singh

Development of North Eastern Region

(Independent Charge)
Prime Ministers Office
Personnel, Public Grievances & Pensions
Department of Atomic Energy
Department of Space

Smt. Nirmala Sitharaman

Commerce and Industry (Independent

Charge)

Dr. Mahesh Sharma

Culture (Independent Charge)

Tourism (Independent Charge)
Civil Aviation

Ministers of State
1

Shri Mukhtar Abbas Naqvi

Minority Affairs
Parliamentary Affairs

Shri Ram Kripal Yadav

Drinking Water and Sanitation

Shri Haribhai Parthibhai

Chaudhary

Home Affairs

Shri Sanwar Lal Jat

Water Resources
River Development and Ganga
Rejuvenation

Shri Mohanbhai
Kalyanjibhai Kundariya

Agriculture

Shri Giriraj Singh

Micro, Small & Medium Enterprises

Shri Hansraj Gangaram

Ahir

Chemicals & Fertilizers

Shri G. M. Siddeshwara

Heavy Industries and Public Enterprises

Shri Manoj Sinha

Railways

1
0

Shri Nihalchand

Panchayati Raj

1
1

Shri Upendra Kushwaha

Human Resources Development

1
2

Shri Radhakrishnan P

Road Transport & Highways

Shipping

1
3

Shri Kiren Rijiju

Home Affairs

1
4

Shri Krishan Pal

Social Justice & Empowerment

1
5

Dr. Sanjeev Kumar Balyan

Agriculture

1
6

Shri Mansukhbhai
Dhanjibhai Vasava

Tribal Affairs

1
7

Shri Raosaheb Dadarao

Danve

Consumer Affairs, Food and Public

Distribution

1
8

Shri Vishnu Deo Sai

Mines
Steel

1
9

Shri Sudarshan Bhagat

Rural Development

2
0

Prof. (Dr.) Ram Shankar

Katheria

Human Resource Development

2
1

Shri Y. S. Chowdary

Science and Technology

Earth Science

2
2

Shri Jayant Sinha

Finance

2
3

Col. Rajyavardhan Singh

Rathore

Information & Broadcasting

2
4

Shri Babul Supria (Babul

Supriyo) Baral

Urban Development
Housing and Urban Poverty Alleviation

2
5

Sadhvi Niranjan Jyoti

Food Processing Industries

2
6

Shri Vijay Sampla

Social Justice & Empowerment

What are Payment Banks or Define a Payment Bank :

We can define a Payment Bank in India as a type of bank which is a
non-full service niche bank. A bank licensed as a Payments Bank
can only receive deposits and provide remittances. It cannot carry
out lending activities. Thus, Payment Banks can issue ATM/debit
cards, but can not issue credit cards as they are not empowered to carry out
lending activities.

What is the Objective of Creating Payment Banks in India :

We can sum up the objectives in one sentence that these banks have
been created to help India reach its financial inclusion targets. This
type of bank can be highly useful for migrant labourers, low
income households, small businesses, and other unorganised
sector entities.
RBI in its guidelines says the objectives of setting up of payments banks
will be to further financial inclusion by providing (i) small savings accounts
and (ii) payments/remittance services to migrant labour workforce, low
income households, small businesses, other unorganised sector entities and
other users.
Some Regulations for Payment Banks :

The minimum paid-up equity capital for payments banks shall be Rs.
100 crore.. For the first five years, the stake of the promoter
should be 40% minimum. Foreign share holding will be
allowed in these banks as per the rules for FDI in private
banks in India.

The bank should be fully networked from the beginning. The

bank can accept utility bills. It cannot form subsidiaries to
undertake non-banking activities.

Initially, the deposits will be capped at Rs.1,00,000 per

customer, but it may be raised by the RBI based on the
performance of the bank. The bank cannot undertake lending
activities.

 25% of its branches must be in the unbanked rural area. The

bank must use the term "payments bank" in its to differentiate it
from other types of bank. The banks will be licensed as payments
banks under Section 22 of the Banking Regulation Act, 1949 and
will be registered as public limited company under the Companies
Act, 2013.
The banks must maintain CRR, minimum 75% of demand deposits in
government bonds of up to one year and maximum 25% in current and fixed
deposits with other scheduled commercial banks for operational purposes and
liquidity management.
What will be the Scope of activities to be allowed to Payment
Banks :
a. Acceptance of demand deposits. Payments bank will initially be restricted to
holding a maximum balance of Rs.100,000 per individual customer.
b. Issuance of ATM/debit cards. However, payment banks cannot issue credit
cards.
c. Payments and remittance services through various channels.
d. BC of another bank, subject to the Reserve Bank guidelines on BCs.
e. Distribution of non-risk sharing simple financial products like mutual fund
units and insurance products, etc.

Where Payments Banks will be able to Deploy their funds :

a. The payments bank cannot undertake lending activities.
b. Apart from amounts maintained as Cash Reserve Ratio (CRR) with the
Reserve Bank on its outside demand and time liabilities, it will be required to
invest minimum 75 per cent of its "demand deposit balances" in Statutory
Liquidity Ratio(SLR) eligible Government securities/treasury bills with
maturity up to one year and hold maximum 25 per cent in current and
time/fixed deposits with other scheduled commercial banks for operational
purposes and liquidity management.

RBIs In Principle Licences to 11 Entities

In response to RBIs call for applications for new Payment Bank licences, 41
applicants were in the race
On 19 August 2015, RBI gave "in-principle" licences to following
eleven entities to launch payments banks:1

Aditya Birla Nuvo

Airtel M Commerce Services

Cholamandalam Distribution Services

Department of Posts

FINO PayTech

National Securities Depository

Reliance Industries

Dilip
Shanghvi,
Pharmaceuticals)

Vijay Shekhar Sharma, (CEO of Paytm)

10

Tech Mahindra

11

Vodafone M-Pesa

(founder

of

Sun

The "in-principle" licence is valid for 18 months within which the

entities must fulfill the requirements. They are not allowed to
engage in banking activities within the period. The RBI will
consider grant full licences under Section 22 of the Banking
Regulation Act, 1949, after it is satisfied that the conditions have
been fulfilled.

How Payment Banks Are Likely To Impact Indian Population :

Indian Finance Minister, Mr Arun Jaitley said payment banks will change the
way people think, change the way they keep the money, where they keep their
money, the way they pay,
We know that still there are large population in India do not have banking
facilities due to Indias geographical spread, regional disparities, reach and
connectivity. It is expected that these payment banks can use the mobile
platform to provide basic banking transactions, in particular, payment for
services and subsidies through mobile phones. Thus, there is still lot of
opportunity available in India for this type of banking provided they get their
technology solutions right. These banks are likely to help expand banking
services to the remotest corner of the country.
New Payment banks needs to introduce new products or new applications, so
that instead of cash, people start carrying out more transactions electronically.
Globally, that has been the trend. However, in India, although the number of
users of credit and debit cards have increased yet these have been limited
penetration on account of costs involved for merchants or establishments
which accept these cards. Mobile phone platforms still has lot of opportunity
to penetrate rural India with alternate methods for transactions.
Whether New Payment Banks Can Prove to be Disrupters for
Existing Banks :
It is very difficult to predict how these new payment banks will impact the
existing banks. Some believe that these banks will prove as disrupters to the
existing PS and private banks. However, RBI Governor is of the view
that these banks would complement rather than compete; as he pointed out,
universal banks can do everything that a payments bank can, but the reverse is
not true. Thus, the existing PS and private banks will have to introduce some
changes in their technology platforms so as to provide similar facilities to their
customers.
Undoubtedly the new payment banks are likely to increase competition for PS
Banks and private sector banks. However, as these new banks will be catering
to the needs of people who have limited funds at their disposal, PS banks, with
much more resources available, can focus on high networth clients.

One of the interesting part is that RBI has given licences for 11 payment banks,
which includes names like Airtel, Vodafone and Idea, which are mobile service
providers and thus already have a customer base of over 580 million potential
customers. They have also already in place the mobile technology which can
really change the scenario. Thus, biggest threat to PS Banks will be coming
from these mobile service providers, as they already have grounds prepared
for them.
How These Payment Banks Will Survive, when they can not lend? :
This is also an interesting question. The questions are being raised as to how
these new banks will be able to survive in absence of income from lending.
However, we are forgetting that most of the new players are already well
established in their fields. These payments banks are expected to play on
volumes as they are likely to romp in to their fold millions of customers who
are currently not within the fold of the formal financial system. This would
lead to large volumes of transactions fetching the payments banks fees - a
charge of even 1 or 2 per cent on a large volume can be lucrative on normal
cash transfers, which will include governments direct benefits transfer
programmes. Moreover, new payments banks can also earn 7.0% or so on
their investments in government securities. The mobile companies will have
limited additional costs and thus they may even offer payment of more than
4% interest, which is the norm among banks as they pay mere 4% on savings
banks. With no need for any provisions or losses on NPAs for these payment
banks, they may become fitter banks than existing banks. .

Other Plans of RBI :

RBI now plans to issue licences for small finance banks. RBI has
already received 72 applications for small finance banks. These
banks will primarily take up basic banking activities in defined
geographies and cater to small business units, marginal farmers,
and shop-keepers, among others.