CHAPTER 1 INTRODUCTION OF THE PROJECT1.1 CONCEPT AND SIGNIFICANCE OF THE STUDY 1.1.1 Definition of Payment Banks A payment bank & a differentiated bank that will undertake only certain restricted banking functions that the Banking Regulation Act of 1949 allows. These activities inclde acceptance of deposits, payments and remittance services, intemet banking and function as business comespondent of other banks. Payment Banks > Payments banks are a new model of banks conceptualized by the Reserve Bank of Indix (RBD).-These banks cannot issue loans and credit cards. Both current account and savings accounts can be operated by such banks. A payments bank is like any other bank, but operating on a smaller scak without involving any credit risk. In simple words, it can carry out most banking operations but can't advance loans or issue credit cards. It can accept demand deposits (up to Rs 1 hkh), offer remittance services, mobile paymentvtransfers/purchases. and other banking services like ATM/debit cards, net banking and third party fund transfers. Payment Banks are banks which will reach their customers mainly through mobile phones rather than traditional bank branches. They can be thought of as mobile walks. However, they can also have physical branches. Not anyone can ask for license for these banks. One has to fulfill some conditions; one of them being is that the minimum capital requirement is Rs 100 crore to open up a Payment Bank.1.1.2 How do Payment Banks work? ‘The Smart Payment Bank may not Look like Bank > Payments banks need to envisage themselves as a mubilayered platiorm that not only facilitates financial transactions, but also drives continuous engagement. Smart Payment Bank Model (Urban/Rural) Mobile/Web Apps {828 & 820) AirMs, Pos, and other enabling infrastructure ee 1.1 Smart Payment Bank Mod E-Commerce Payment through Smart Payment Bank > India’s e-commerce market was worth about USD 3.8 billion in 2009, it wert up to USD 17 billion in 2014 and to USD 23 billion in 2015 and is expected to touch whopping USD 38 billion murk by 2016 (According to Assocham ) Unlike the Westem countries, online shopping. in India is mostly done through Cash on Delivery payment method. In India, CoD is used as the mode of payment for 5 out of 10 online transactions tee E-commerce Portate Se ead tede ee ee eae ened prepa innate 1.2 Smart Payment Bank Model