A study related to consumer perception towards payment bank

A project submitted to

University of Mumbai for partial completion of the degree of

Bachelor’s in commerce (Banking and Insurance)

Under the Faculty of Commerce

By

Naik Nishanth Sundar

Under the guidance of

Dr. AASHISH JANI

S.M.T M.M.K COLLEGE OF COMMERCE & ECONOMICS

BANDRA(W)

April (2019)
A study related to consumer perception towards payment bank

A project submitted to

University of Mumbai for partial completion of the degree of

Bachelor’s in commerce (Banking and Insurance)

Under the Faculty of Commerce

By

Naik Nishanth Sundar

Under the guidance of

Dr. AASHISH JANI

S.M.T M.M.K COLLEGE OF COMMERCE & ECONOMICS

BANDRA(W)

April (2019)
 S.M.T M.M.K College of Commerce And Economic

Certificate

This is to certify that Mr. Nishant Sundar Naik has worked and
duly completed his project work for the degree of bachelor’s in
commerce (Banking And Insurance ) under the faculty of Commerce in
the subject of Research Methodology and his project is entitled , “A
study related to consumer perception towards payment bank” under my
supervision .

I further certify that the entire work has been done by the learner under
my guidance and that no part of has been submitted previously from any
degree or diploma of any University.

It is his own work and facts reported by his personal findings and
investigations .

Name and signature of

Guiding teacher

Date of submission
 Acknowledgement

This to list who are all have helped me is difficult because they are so
numerus and the depth is so enormous .

I would like to acknowledge the following as being idealistic channels

and fresh dimensions in the completion of this project

I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I would like to thank principle , Dr. Ashok C Vanjani for providing the
necessary facilities required for completion of this project .

I take this opportunity to thank our coordinator Dr. Aashish Jani for his
memorial support and guidance .

I would also like to express my sincere gratitude towards my project

guide whose guidance and care made the project successful .

I would like to thank my college library for having provided videos

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or
indirectly help me in the completion of the project specially my Parents
and peers who supported me to do my project.
 Declaration by learner

I the undersigned Mr. Nishanth Sundar Naik declare that the work
embodied in this project work titled “A study related to consumer
perception towards payment bank” forms my own contribution to the
research work carried out under the guidance of Dr.Aashish Jani is a
result of my own research work and has not been previously submitted to
any other University for any other Degree/Diploma to this or any other
University.
Wherever reference has been made to previous work of others, it has been
clearly indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical
conduct.

Name and Signature of the

learner
Certified by
Name and Signature of the Guiding Teacher
 INDEX
Sr no. Particulars Pg.
no.
1 Chapter 1 : 1
Introduction to payments bank.
1.1) Definition of payments bank.
1.2) Payments bank.
1.1.1) how Dose payment bank works?
1.1.2) history of Indian bank.
1.3) problem faced by banking industry.
1.4) Characteristics
1.4) Features of payment bank
1.5) Payments bank study
1.6) RBI guidelines
2 Chapter 2 : 18
Research method
2.1) Objectives.
2.2) Hypothesis.
2.3) Significance of The Study.
2.4) Research Design/ Sample Design
2.5) Sample Size
2.6) Sample Period
2.7) Sample Techniques
3 Chapter 3 : Review of literature 24
4 Chapter4 : Data Analysis , interpretation and Presentation. 38
4.1) Primary data
4.2) SWOT analysis
4.3) Findings of the study
5 Chapter 5 : Conclusion 52

 Bibliography
 Index for Tables
Table no. particular Page
no
Table 1.1 Age 29
Table 2.1 Qualification 30
Table 3.1 Gender 31
Table 4.1 KYC 32
Table 5.1 PAN/Aadhar 33
Table 6.1 Security 34
Table 7.1 Discounts/loyalties 35
Table 8.1 Anytime/anywhere 36
Table 9.1 Interest/charges 37
Table 10.1 Benefit/changes 38
Table 11.1 Types of bill 39
Table 12.1 Heard from 40
Table 13.1 Provider 41
Table 14.1 Transaction 42
Table 15.1 Type of transaction 43
Table 16.1 Services 44
Table 17.1 Payment Method 45
Table 18.1 Application Security 46
Table 19.1 Payment Security 47
Table 20.1 Savings Account 48
Table 21.1 Loans/Advances 49

Index for figures

Figure no. particular Page
no
Figure 1.1 Age 29
Figure 2.1 Qualification 30
Figure 3.1 Gender 31
Figure 4.1 KYC 32
Figure 5.1 PAN/Aadhar 33
Figure 6.1 Security 34
Figure 7.1 Discounts/loyalties 35
Figure 8.1 Anytime/anywhere 36
Figure 9.1 Interest/charges 37
Figure 10.1 Benefit/changes 38
Figure 11.1 Types of bill 39
Figure 12.1 Heard from 40
Figure 13.1 Provider 41
Figure 14.1 Transaction 42
Figure 15.1 Type of transaction 43
Figure 16.1 Services 44
Figure 17.1 Payment Method 45
Figure 18.1 Application Security 46
Figure 19.1 Payment Security 47
Figure 20.1 Savings Account 48
Figure 21.1 Loans/Advances 49
 1

CHAPTER 1
Introduction to payments bank

1.1) Definition of payments bank.

1.2) Payments bank.

1.1.1) how Dose payment bank works?

1.1.2) history of Indian bank.

1.3) problem faced by banking industry.

1.4) Characteristics

1.4) Features of payment bank

1.5) Payments bank study

1.6) RBI guidelines

 2

1.1 Definition of payments bank

Payments bank is a different bank that will undertake only certain restricted banking
functions that the banking regulation act 1949 allows best Internet banking and
function as business correspondent of other banks

Payments banks are a type of differentiated bank introduced by the RBI for promoting
financial inclusion and facilitating payments and remittance flows. They are different
types of banks compared to the conventional universal banks as the Payments banks
can concentrate in only two types of activities – accepting demand deposits and
facilitating payments. RBI also allowed Small Finance Banks for supporting financial
inclusion. They have slightly different business activities and regulations.

The RBI has made extensive guidelines for the licensing, regulation and product
delivery of Payments Banks though its circular in July 2014. In August 2015, RBI has
published the list of 11 payments bank candidates.

1.2 Payments bank

Payment bank are a new model of banks computer I said by the reserve Bank of India
RBI. These banks cannot issue loans and credit cards. Both current account and
savings account can be operated by search bank account.

Payment bank is like any other bank but operating on a smaller scale without in
involving any credit risk. In simple words , it can carry out most banking operations
but can’t advice loans or issue credit cards. It can accept demand deposits (up to Rs
one lakh ) , offer remittance services ,mobile payment /transfer/purchases and other
banking services like ATM /debit cards ,net banking and third-party fund transfer.

Payments bank a bank which will reach India customer mainly to mobile phones
rather than traditional bank branches. It can be also referred as a mobile wallet .
However , they can be also having physical branches. Not anyone can ask for the
license of the banks. One must fulfil some conditions ; One of them being is that the
minimum capital required is rupees 100 crore to open up a Payment Bank.

1.2.1 How do payment bank work?

i. The smart payment bank may not look like bank

 3

a. Payment bank needs to envisage Themselves as multiplayer platform that not

only facilitate financial transactions ,but also drives continuous engagement

ii. E-commerce payment through smart payment bank

a. India’s ecommerce market was what about USD 3.8 billion in 2009 ,it went up
to USD 17billion mark by 2014 and to USD 23billion in 2015. Unlike the
Western countries ,online shopping in India is mostly done through cash on
delivery payment method .in India COD is used as the mode of payment of 5
out of 10 online transactions

b. On the contrary ,the situation is completely reversed in Western countries

where approximately more than 80% of online transactions are made by debit
or credit cards ,net banking any other alternate channels of online payment.
COD transactions are expense you for the seller ,especially in case of product
returns. Instances of product return are also hire in COD transactions
approximately 35% more .

c. Nearly all country companies change some extra amount for collecting cash.
These costs divided in 2 parts fixed and variable costs. Fixed cost margin are
INR 20 to 150 and variable cost is 1% to 3% of the COD amount . This is for
higher price products such as laptops and mobile phones. If the item is price
lower than the CEOD charges at times exceed one set margin in the product
and if the item is priced very high, then the percentage CEO discharge turns
out to be in hundreds or even Thousands. To encourage customers to pay
digitally companies are offering discounts or freebies: ecommerce companies
run promos or discount offers only for consumers who are paying online .

1.2.2 History of Indian Banking

I. Types of banks during pre-independence

Apart from SBI ,another noted bank that was the wind till now is Punjab National
Bank. Established in 1895 in Lahore ,the bank is still working in the country.
During pre-independence era ,3 types of banks were not issued in the banking
industry. These are
 4

 Presidency banks ,which operated as quasi-central bank and was honoured

by the government of the pre-independence era call stop
 Exchange banks which works under the British merchants and tripod the
foreign exchange market.
 Indian joint stock banks ,where the bank was followed by private group.
Dewar basic shareholders. The bank issued the stock ,the profit was said
by the shareholders.
II. Banking industry post-independence.

After India became independent ,a lot of changes took place in the Indian economy
and the banking industry. The British no longer a part of the Indian economy. The
Indian government to provocative measures to streamline the economy and post
industrialisation. For stability in the economy ,it created banking regulations ,such as

 the Reserve Bank of India RBI was created in 1949 at the central bank of
India under the reserve Bank of India act. It had the authority to director
the banks. the RBI could regulate ,direct inspect other banks.
 No to banks code have common directors.
 No bank could open another branch without the permission from RBI.
License would be issued if permissions is granted.
III. Major events in the Indian banking history

after the Indian government formed RBI ,a series of changes followed. till date ,here
is a list of some important events in banking .

 RBI was formed in 1934 .

 the Indian government password the banking regulation act 1949.
 nationalisation of bank was accomplished in 1955 .
 SBI sub groups were nationalised in 1959.
 Government implemented insurance cover for people who deposited
money in banks in 1961.
 The Indian government password the banking regulation act 1965 where
RBI was given in mains power to handle financial service .
 Rural banks were created in 1975.
 Major changes in the economy and banking where seen in 1991 reforms.
 5

 Tech-savvy foreign or private banks got license for banking in India.

These include HSBC ICICI ,UTI , Axis Bank, and HDFC .
 ICIC was the first bank to introduce net banking services .
 Banks with foreign investors got opportunities in foreign direct investment
after reforms in post 1991.

So, after liberalisation in 1991 ,there are three types of bank that is government
owned, private ,and foreign banks in the commercial banking sector. Where are also
rural banks, Co-operative banks and development banks.

IV. Banking system 2014 onwards and role of RBI

Banks post liberalisation has been diversifying. New reforms are being made to
ensure loan system is convenient to the loan seekers and not burdensome for the
banks. The RBI has been taking steps to ensure that is ….

 A rise in the number of banks, including private and foreign banks.

 A change in banking operations for the convenience of customer.
 Fine levied on wilful defaulters.
 FDI opportunities Ford of foreign banks.
 More use of technology in the banking system.

1.3 Problems Faced by Banking Industry.

1) Asset Quality :

The biggest risk to India’s bank's is the rise of bad loans. Does slowdown in the
economy in the last few years led to arise bad loans or non-performing assets . Bees
are loans which are not repaid back by the borrower. They are, a lost for the bank. Net
performing assets amount to only 2.36 percent of the total loans in the banking
system. This may not seem like an alarm in figure. However ,it does not take into
restructured assets -when a borrower is unable to pay back, and the bank makes the
lone more flexible to be paid back over a long period of time. Restructured assets to
put pressure on a bank’s profitability. Together ,search stressed asset account for 10.9
percent of the total loans in the system. And these are just loans which are identified
as stressed assets. 36.9 percent of the total death in India is a risk ,according to IMF
 6

report. Yet, banks have capacity to absorb only 7.9 percent losses . So, if this debt
turns bad too, bank will face major losses .

2) Capital Adequacy :

One way a try to ensure it is protected from bad loan is by setting aside money as a
provision . This money cannot be used for any other purposes including lending. As a
result ,banks have lower capital available to use for its various operations. The capital
adequacy ratio measures how much capital a bank has. When this fall, the bank must
borrow money or use depositor’s money to lend. This money is this QR and costlier
than the banks owned capital. For example ,depositor can withdraw his or her money
any time they want. So, fall in CAR is worrisome. In the last few years , CAR as
decline steadily for Indian banks, especially for Public sector bank. Moreover ,banks
are not able to receive money easy ,especial E public sector banks which have higher
number of bad loans. If banks do not sure up their capitals soon ,some code fail to
meet the minimum capital requirement set by the RBI. In search a case ,they could
face severe issues.

3) Unhedged Forex Exposure :

“The wild gyrations in the forex market have the potential to inflict significant stress
in the books of Indian companies who have heavily borrowed abroad “, Mundra said
in his speech. Distress can affect the ability to pay back depth to Indian banks. As a
result, the RBI wants bank to ensure companies they to do not exposed themselves to
unnecessary debts in dollars.

4) Balance Sheet Management :

In the past few years ,many banks have tried to delay setting aside money as
provisions. One reason for this is that bank chief executive has a shot tenure ,during
which time they want to post higher net profit and cheer investor. “it must be
appreciated that CEO’s /CMD’ would come and go but the institutions perpetual
entities. The only thing which can perpetuate their existence is a stronger and
healthier balance sheet “,Mundra said . Deferring provisioning is harmful in the long
term. It reduces the banks’ ability to with stand financial pressures. This is even more
problemata considering the poor capital adequacy in Indian banks. In fact ,investors
 7

would be happier if the management addresses and salts out problems rodded and
posting Haryana prophets that cannot be sustained in the long term ,the deputy
governor said.

5) Growth of Banking Industry :

i. The Indian banking system consists of 26 public sector banks ,25 private
sector banks ,43 foreign banks ,56 regional rural bank ,1589 urban cooperative
banks ,and 93,550 rural cooperative banks ,In addition to cooperative credit
institutions
ii. Public sector banks control nearly 80% of the market ,there by leaving
comparatively much smaller shares shares for its private peers . Banks are also
Anchorage India customers to manage day finance using mobile phones.
iii. Total leading and deposits increased at and compound annual growth rate
(CAGR) of 20.7 percent and 19.7 percent respectively ,during FY 2007-2014
and are further poised for growth ,baked by demand for housing and personal
finance. Total assets size of banking sector assets is expected to increase to
USB dollar 28.5 trillion by FY 25. Deposits have grown at CAGR of 13.6
percent during FY 05-15 to an estimated USD 1.48 trillion in FY 15. Deposit
growth has been mainly driven by strong growth in savings amid rising
disposable income levels.
iv. Another emerging trend witnessed by the banking sector is the use of social
media platforms like Facebook to attract customers. In September 2013 ICICI
Bank launcher Facebook bill payment and fund transfer services call “Pockets
“For customer convenience.
v. According to the report by you Zinnov ,globalization and market expansion
firm, IT add option in BSFI sector in India ,the information technology
industry spread in is expected to reach USB 3.5 billion . Best 30 also
highlighted the growing maturity of Indian BFSI organizations in IT
adoption ,as technology is seen as a driver of business value .technology firms
have great potential to explore in the BFSI sector ,which contribute 8% of
India’s gross domestic product.
vi. Rising income are expected to enhance the need for banking services in rural
areas under for drive the growth of the sector ;programs like MNREGA have
 8

helped in increasing rural income aided by the recent Jan Dhana yojana . The
reserve Bank of India has relaxed exit branch licensing policy ,thereby I love
in banks to setup new branches in tyre 2 to tyre 6 centres , without prior
approval from RBI. It has emphasised the need to focus on spreading the reach
of banking services to the unbanked population of India .

1.4 Characteristics of Payments Bank.

The objective of setting up of payments banks is to provide fully networked and

technology driven modern transaction, service to the unbanked_ Payment banks offer
internet banking, bill payment service, remittance service through various channels,
sell mutual funds, insurance, pension etc. They can act as Business Correspondent
(BC) of other banks subject to compliance of RBI guidelines on BCS Further,
payment banks may issue prepaid cards (virtual cards) ATM/debit cards But they
cannot issue credit cards or undertake any other lending activities. In addition to
providing above modern transaction services, payments banks are expected to
facilitate migrant labour workforce, low income households, small businesses, and
other unorganised sector entities, as a part of financial inclusion measure Thus,
payment banks are allowed to provide limited banking service to the unbanked
general public Payment banks can hold a maximum demand deposit of RS IOO,OOO
per individual customer NRI's deposits cannot be accepted The minimum 75% of
demand deposits collected from the public is required to be invested in eligible
Government securities/treasury bills with maturity up to one year so as to maintain
Statutory Liquidity Ratio (SLR). The residual balance of maximum 25 per cent can be
held in current and time/fixed deposits with other scheduled commercial banks for
operational and liquidity management purposes. The payments banks need to set up a
high-powered Customer Grievances Cell to handle customer complaints

Payment banks can be established by existing non-bank Pre-paid Payment Instrument

(PPI) issuers; other entities such as individuals / professionals; Non-Banking Finance
Companies (NBFCs), corporate Business Correspondents(8Cs), mobile telephone
companies, super-market chains, companies, real sector cooperatives; that are owned
and controlled by residents; and public sector entities may apply to set up payments
banks A promoter/promoter group can have a joint venture with an existing scheduled
commercial bank to set up a payments bank. However, scheduled commercial bank
 9

can take equity stake in a payments bank to the extent permitted under Section 19 (2)
of the Banking Regulation Act, 1949_Promoter/promoter groups should be 'fit and
proper' with a sound track record of professional experience or running their
businesses for at least a period of five years in order to be eligible to promote
payments banks>

The minimum paid-up equity capital for payments banks shall be Rs_100 Crore_ The
promoter's minimum initial contribution to the paid-up equity capital of such
payments bank shall at least be 40 per cent for the first five years from the
commencement of its business. The foreign shareholding in the payments bank would
be as per the Foreign Direct Investment (FDI) policy for private sector banks as
amended from time to time.

1.4.1 Features of Payments Banks:

Payments banks will do almost all the work that is currently being done by
commercial banks; but the payments banks will work under certain restrictions like;

1. Like the commercial banks, the payment banks will also accept the money of the
people as a deposit, but the limit is fixed, that means the payments banks can accept
deposits up to a maximum of Rs. 1 lakh from a customer.

2. Payments banks; will be entitled to issue ATM or debit card to their customers but
cannot issue a credit card.

3. Payments banks; will be authorised to open both savings and current accounts of
their customers.

4. Payments banks cannot provide loans or lending services to the customers.

5. Payments banks cannot accept deposits from the Non-Resident Indians (NRIs).It
means; the people of Indian origin who have settled abroad cannot deposit their
money in the payment banks.

6. Payments banks will be allowed to make personal payments and receive

remittances from the cross border on the current accounts.

7. Payments banks will have to deposit the amount in the form of Cash Reserve Ratio
(CRR) with RBI like other commercial banks do.
 10

8. Payments Banks will have to invest minimum 75% of its demand deposits in
government treasury/securities bills with maturity up to one year and hold maximum
25 %in current and fixed deposits with other commercial banks for operational
purposes.

9. Payment bank can provide the Facility of utility bill payments to its customers and
the general public.

10. Payments banks cannot open subsidiaries to undertake Non-Banking Financial

Services activities.

11. Payments bank; with approval from RBI, can work as a partner with other
commercial banks and can sell mutual funds, pension products and insurance
products.

12. Payments banks must use the word "Payments Bank" in their names to look
different from other banks.

13. Payments banks will be allowed to provide internet banking and mobile banking
facility to their customers.

14. A payments banks can become a business representative of any other bank, but it
will have to comply with the guidelines of Reserve Bank of India.

15. The payments banks can accept remittances to be sent to or receive remittances
from multiple

banks through payment mechanism approved by RBI, such as RTGS / NEFT / IMPS.

1.5 Payment bank (STUDY)

A. Background of payments bank in India

a. The term “Payments Bank” is new and seems to have been invented in Indian
context . In September 2013 ,a “Committee on Comprehensive Financial
Service for Small Businesses and Low-Income Households”, headed by
Nachiket Mor, was formed by the RBI. By Jan 2014 ,the committee submitted
its final report and one of its recommendations was the formation of a new
category of bank card payments bank.
 11

b. The about was followed by announcement in union budget 2014 to 2015

where in it was decided that “after making suitable changes to current
framework ,a structure will be put in place for continuous authorization of
universal bank in the private sector in the current financial year. RBI will
create a framework for licensing of small banks and other differentiated banks.
Differentiated banks serving interests ,local area banks ,payments bank ,etc.
Are contemplated to meet credit and remittance needs of small businesses
,unorganised sectors ,low income shareholders , farmers and my current
workforce”.
c. Taking cues from the budget ,RBI issued the draft guidelines in July 2014
itself on payment banks and small banks as differentiated or restricted banks.
Beside on the feedback RBI came out with final guidelines of payments bank
in November 2014 and call the applications from entities which are interested
to start search banks .
B. Objectives of payments bank
a. The objective of setting up of payments bank will be to further financial
inclusion by providing small savings account .
b. Payments or remittance services to migrate labour workforce ,low income
households ,small businesses ,other unorganised sector entities and other
users.
c. Scope of payment bank
d. Acceptance of demand deposits. Payments bank will initially be restricted to
hold a maximum balance of rupees one lakh per individual customer.
e. Insurance of ATM or debit cards . However .payment banks cannot issue
credit cards.
f. Payments and remittance services through various channels.
g. BC of another bank, Subject to the reserve bank guidelines on BC (Business
correspondence).
h. Distribution on non-risk sharing simple financial products like mutual fund
units and insurance products , etc.
C. Advantages of payments bank
a. Individuals can use the payment bank account to make daily or monthly cash
transactions ,either through debit card order through mobile.
 12

b. This can also help guard against debit card frauds ,sins you can help a smaller
balance in this account.
c. Since there is no restriction on the income level of those who wish to open
account in payments bank ,those who have salary account in regular bank
account can also open an account in payments bank .
d. Students leaving away from home would also be able to use facilities of
payments bank pay their fees.
e. Small businesses that have fair 6 employees can operate salary account in
payments bank , instead of paying out cash.
f. While a full-fledged commercial bank offers all these services ,base change
fees and have stringent KYC norms (know your consumer ). In a payment
bank , KYC norms may be simplified, and changes may be lower. Payments
bank will target the nonbanking populations. So, they might have lenient KYC
norms.
g. Also ,as they will be more technology intensive ,day care fees would be lower
than regular banks.
h. For a retail chain ,payment bank can also be a good way to retain customers .
“If a customer deposit money with supermarket and uses states banking
facilities ,they will remain loyal to the store. The store can also of or other
services to the customer. So, you can pay your bills while shopping.
Similarly ,mobile companies also want to retain customers ,as cost of
acquiring a new customer is higher”, safe Abizer Diwanji , national head of
finance services ,India .
i. Payments bank may also offer a higher rate of return on Savings Bank
accounts in order to attract customers.
j. How about the real attraction of customers will not be the interest of
deposits ,but the convenience of carrying out banking transactions at their door
steps .
k. The biggest advantage of payments bank that can provide the last mile
connectivity, Which regular banks cannot. Show it is possible that your
neighbourhood store tan function as a bank branch. While many of them
already offer payment services through companies like pay TM now ,as
banks ,these days will be regulated.
 13

D. Disadvantages of payments bank

a. Payments bank cannot lend money (bank generally Ernst spread on the money
cheat lends out from the money it takes in a deposits ) . So, to make money
and be profitable ,they must change a customer for the transactions that are
executed through them.
b. The basic pension of a successful payment bank will be :”high quality low
cost of delivery”, Regular education or incentivise and encourage its
customers to do cashless transactions and robust technological framework.
Essentials the cost of transactions for a payment bank need to be significantly
lower offer transaction branch beside banking model.
c. RBI has not said how many licenses it will issue in each category that is
payment bank and small banks .
E. How to payments bank promote financial inclusion ?
a. Currently RBI has issued licence is to companies which are not supermarket
chains (have a large distribution network ), mobile operators (have a large
customer base ), order Postal Service which traps in a large number of
customers.
b. Best savings and remittance services of payments bank target people living in
rural areas or have limited to no access to payment banks. Send this companies
have I washed distribution network or a customer base , they help in financial
penetration ,making sure that financial and banking services reach every Nook
and corner in this country. This promote financial savings among the poorest
of the poor in the nation .

F. How can payment bank achieve financial inclusion ?

c. Payments bank Anna all about innovation. Be use technology to provide you
optimum and highly efficient banking services.
d. Payments bank are not rivalling to commercial banks. Big compliment
banking services offered by commercial banks. Payment bank can reach
people in rural areas where no commercial banks have branches.
e. Commercial banks collaborate with payments bank to use their technology .
Commercial banks can also start joint ventures with payment bank ,to launch
innovative services and products.
 14

f. A payment bank cannot give loan on issue credit cards . How about a payment
bank and become a banking correspondent or business correspondent of a
commercial bank? These are basically third parties ,which provide banking
services to their door steps ,popularly known as BC’s. They provide cash
transactions services ,search as opening Savings Bank account or taking
deposits from customers at the door steps.

More people in India have a mobile phone subscription than bank account . Mobile
phones are the new tools of banking. The rural customer has never had it so good.
Financial and banking services are at his door steps.

1.6) RBI releases Guidelines for Licensing of Payments Banks

The Reserve Bank of India (RBI) released on its website today, the Guidelines for
Licensing of Payments Banks.

Key features of the Payments Banks guidelines are:

i) Objectives:

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.

ii) Eligible promoters :

a. Existing non-bank Pre-paid Payment Instrument (PPI) issuers; and other

entities such as individuals / professionals; Non-Banking Finance Companies
(NBFCs), corporate Business Correspondents(BCs), mobile telephone
companies, super-market chains, companies, real sector cooperatives; that are
owned and controlled by residents; and public sector entities may apply to set
up payments banks.
b. A promoter/promoter group can have a joint venture with an existing
scheduled commercial bank to set up a payments bank. However, scheduled
 15

commercial bank can take equity stake in a payments bank to the extent
permitted under Section 19 (2) of the Banking Regulation Act, 1949.
c. Promoter/promoter groups should be ‘fit and proper’ with a sound track record
of professional experience or running their businesses for at least a period of
five years in order to be eligible to promote payments banks.

iii) Scope of activities :

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. Payments banks, however, 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.

iv) Deployment of 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.

v) Capital requirement :

The minimum paid-up equity capital for payments banks shall be Rs. 100 crore.

a. The payments bank should have a leverage ratio of not less than 3 per cent,
i.e., its outside liabilities should not exceed 33.33 times its net worth (paid-up
capital and reserves).
 16

vi) Promoter's contribution: The promoter's minimum initial contribution to the

paid-up equity capital of such payments bank shall at least be 40 per cent for the first
five years from the commencement of its business.

vii) Foreign shareholding: The foreign shareholding in the payments bank would be

as per the Foreign Direct Investment (FDI) policy for private sector banks as amended
from time to time.

viii) Other conditions :

a. The operations of the bank should be fully networked, and technology driven
from the beginning, conforming to generally accepted standards and norms.
b. The bank should have a high-powered Customer Grievances Cell to handle
customer complaints.

ix) Procedure for application: In terms of Rule 11 of the Banking Regulation

(Companies) Rules, 1949, applications shall be submitted in the prescribed form
(Form III) to the Chief General Manager, Department of Banking Regulation, Reserve
Bank of India, 13th Floor, Central Office Building, Mumbai – 400 001. In addition,
the applicants should furnish the business plan and other requisite information as
indicated. Applications will be accepted till the close of business as on January 16,
2015. After experience gained in dealing with payments banks, applications will be
received on a continuous basis. However, these guidelines are subject to periodic
review and revision.

x) Procedure for RBI decisions:

a. An External Advisory Committee (EAC) comprising eminent professionals

like bankers, chartered accountants, finance professionals, etc., will evaluate
the applications.
b. The decision to issue an in-principle approval for setting up of a bank will be
taken by the Reserve Bank. The Reserve Bank’s decision in this regard will be
final.
c. The validity of the in-principle approval issued by the Reserve Bank will be
eighteen months.
 17

d. The names of applicants for bank licences will be placed on the Reserve Bank
website.

Background

It may be recalled that in the Union Budget 2014-2015 presented on July 10, 2014,
the Hon’ble Finance Minister announced that:

“After making suitable changes to current framework, a structure will be put in place
for continuous authorization of universal banks in the private sector in the current
financial year. RBI will create a framework for licensing small banks and other
differentiated banks. Differentiated banks serving niche interests, local area banks,
payment banks etc. are contemplated to meet credit and remittance needs of small
businesses, unorganized sector, low income households, farmers and migrant work
force”.

Accordingly, the Reserve Bank formulated and released for public comments draft
guidelines for licensing of payments banks in the private sector on July 17, 2014.

Several comments and suggestions were received from interested parties and
public on the draft guidelines. Considering the feedback received, the guidelines
on payments banks have been finalised.
 18

CHAPTER 2
RESEARCH METHOD

2.1) Objectives.
2.2) Hypothesis.
2.3) Significance of the Study.
2.4) Research Design/ Sample Design
2.5) Sample Size
2.6) Sample Period
2.7) Sample Techniques
 19

2.1 Objectives of research :

1. Study the factor influencing payment bank by customers.

2. To analyse the strength & opportunities in payments bank
3. Challenges/weakness /problems to payment bank
4. To analyse the impact of payment bank on Indian economy

2.2 Hypothesis:

H0: There is no significance difference in customer perception towards payment

bank.

H1: There is significance difference in customer perception towards payment bank .

2.3 Significance of the study.

1. They can enable transfers and remittances through a mobile phone.

2. They can offer services such as automatic payments of bills, and purchases in
cashless, cheque less transactions through a phone.
3. They can issue debit cards and ATM cards usable on ATM networks of all
banks.
4. They can transfer money directly to bank accounts at nearly no cost being a
part of the gateway that connects banks.
5. They can provide forex cards to travellers, usable again as a debit or ATM
card all over India.
6. They can offer forex services at charges lower than banks.
7. They can also offer card acceptance mechanisms to third parties such as the
‘Apple Pay.’
8. They can’t offer loans but can raise deposits of up to ₹1 lakh and pay interest
on these balances just like a savings bank account does.
9. They cannot take lending activities.
 20

This will be focused to Rural India where people still make all transaction in cash. A
virtual account will be opened based on unique mobile no. Customer can make a
transaction or remittance through web based mobile application or through
IVR/USSD gateway to registered merchant or user. PB user can withdraw cash or top-
up their accounts from points (Vendor, ATM, Agent, etc) recognized by their
payment bank service provider.

Payment bank is a safe and secure. Though in India online transactions are safer &
secure compared to any other part of the world. The 2-factor authentication is
mandatory for all cashless transactions

2.4 Research Design/Sample Design:

This research project is based on descriptive research methodology using quantitative

&Qualitative Techniques.

2.4 Sample Size:

Sample size for research project is 30 (customer response)

2.5 Sample Period :

January - February 2019

2.7 Sample Techniques / Method

It can be classified as

Primary data- In the research primary data was collected from survey and
questionnaire through online google form available.

2.8 Survey Questionnaire

1) Age:

Below 20
 21

20-30
40 Above

2) Qualification :

10TH (S.S.C)
12Th (H.S.C)
Degree (Graduate)
Post Degree (Post Graduate)

3) Gender :

Male
Female

YES / NO Type Questions:

S.R. Particulars YES NO

no (Y) (N)

4 Do you have completed the KYC form required in the

application/app ?

5 Do you required PAN number or AADHAR number for

registration/setting the account ?
6 Do you feel safe about the details that you are providing to
payments bank ?

7 Do you receive a discount ,rewards or any loyalties ?

8 Do you feel convenient and useful to be used anywhere,

anytime ?

9 Do you receive any interest or charges (service charge / fees)

on using the application ?

10 Have you ever noticed benefits on using this services through

the application past versus now ?

Multiple Choice Questions :.

11. What type of bills do you pay using payment bank / payment bank
services?
 22

Electricity Water Fairs

Rent Mobile All of the above

12. How did you hear about this payments bank ?

T.V. Poster Online Friends Family

13. Who provided you are payments banking service ?

A bank mobile operator Don’t know

14. How often do you make transactions ?

Once several times week

monthly once occasionally

15. Types of transactions you do most.

Airtime recharge fund transfer balance inquire

statement bill payment purchasing

Rating Scale:

1. Highly satisfied.

2. Satisfied.

3. Neutral.

4. Dissatisfied.

5. Highly Dissatisfied.

n 1 2 3 4 5
 23

o
1 How much are you satisfied with the services offered by
6 them ?
1 How much are you satisfied with the payment bank payment
7 method ?
1 How much are you satisfied with the password that
8 application is protected on your phone or device?

1 How much are you satisfied with payment bank payment

9 security ?

2 How much are you satisfied with the saving bank account
0 open here ?

2 How much are you satisfied with loans or advances given by

1 the payment bank ?

Secondary data- Information already existed on the website and was collected from
various sources and other literature available.

SWOT analysis done on study related to consumer perception towards payment bank
and its impact on Indian economy is written and is provided in chapter 4
 24

CHAPTER 3
Review of Literature
 25

Singh R (2003) , in his paper Profitability management in banks under deregulate

environment, IBA bulletin, No25, has analysed profitability management of banks
under the deregulated environment with some financial parameters of the major four
bank groups i.e. public sector banks, old private sector banks, new private sector
banks and foreign banks, profitability has declined in the deregulated environment.
He emphasized to make the banking sector competitive in the deregulated
environment. They should prefer noninterest income sources.

Singla HK (2008) , in his paper, " financial performance of banks in India," in

ICFAI Journal of Bank Management No 7, has examined that how financial
management plays a crucial role in the growth of banking. It is concerned with
examining the profitability position of the selected sixteen banks of banker index for a
period of six years (2001-06) The study reveals that the profitability position was
reasonable during the period of study when compared with the previous years. Strong
capital position and balance sheet place Banks in better position to deal with and
absorb the economic constant over a period

Prashanta Athma (2000) , in his Ph D research submitted at Usmania University

Hyderabad, Performance of Public Sector Banks A Case Study of State Bank of
Hyderabad, tried to evaluate the performance of Public Sector Commercial Banks
with special emphasis on State Bank of Hyderabad. The period of the study for
evocation of performance is from 1980 to 1993-94, a little more than a decade. In this
study, Athma outlined the Growth and Progress of Commercial Banking in India and.
analysed the trends and deposits, various components of profits of SBH, examined the
trends in Asset structure, evaluated the level of customer satisfaction and compared
the performance of SBH with other PSBs, Associate Banks of SBI and SBI. Statistical
techniques like Ratios, Percentages, Compound Annual rate of growth and averages
are computed for the purpose of meaningful comparison and analysis. The major
findings of this study are that since nationalization, the progress of banking in India
has been very impressive. All three types of Deposits have continuously grown during
the study period, though the rate of growth was highest in fixed deposits. A
comparison of SBH performance in respect of resource mobilization with other banks
showed that the average growth of deposits of SBH s higher than any other bank
group. Profits of SBH showed an increasing trend indicating a more than
 26

proportionate increase in spread than in burden. Finally, majority of the customers

have given a opinion about the various statements relating to counter service offered
by SBH

Goal (2015) in her paper “Payment Bank: A New Landscape for Indian Banking
Sector” suggested that payment banks present an exciting opportunity for digital
financial inclusion in India.

Kesavan (2015) in his study “To the Era of Payment Banks by Reserve Bank of
India with Specific Reference to Indian Banking Sector” has examined that
innovation can give the better success to the banking sector in India. But it must
showcase an exemplary performance in gaining customer satisfaction and fulfilling
the requirements of customers, it is the only way of gaining success for a bank.

Pande (2015) in his work “Payment Banks – A Newer form of Banks to Foster
Financial Inclusion in India” suggested that payment banks is good mean to correct
financial inclusion in Indian perspective and these will contribute to growth of cross
sections of our society .

Sandanshive & Katdare (2015) in their paper “Analysis of In-principle

License Entities to Act as Payment Bank: Financial Inclusion Perspectives”
concluded as payment bank is the financial inclusion of the unbanked population of
the rural areas and low-income households , which are not included by the rural bank
branches.

Chandarana (2015) in her paper “Payment Banks- A Need of Digital India”

suggested that payment banks promises to be a game changer because of by using the
mobile platform to provide basic banking transactions through mobile phones and the
decision to license some of the country’s biggest corporate and mobile telecom firms
to start payment banks promises to be similar game changer in India.

Srinivasan & Subramanian (2015) in their paper “Payment Banks in India –

Demystified” concluded that with the entry of payment banks , the process of shifting
money from bank accounts to wallets will become truly seamless , payment banks
would be really a game changer in Indian banking system.
 27

Vyas, Gaur & Singh (2016), discussed the evolution of payment banks. The
study evaluates the scope of payment banks in fulfilling the objectives of financial
inclusion. They also compare the Indian scenario with the success of M-Pesa in
Kenya.

Krishnakumar (2015) analysed the existing business operations of payment

banks and proposed a theoretical model as an improvement over the existing model.
They argue that the current telecom boom along with innovation in technology can
assist in reform the banking sector and provide impetus for the cause of financial
inclusion. Similarly, Winn (2015) outlined the mobile payment mechanisms in Kenya,
Brazil and India.

Mas (2009) Few studies have analysed the concept of payment bank. In a
landmark article he discussed the regulations for branchless banking which includes
payment banks in India. The study argued that the regulatory framework needs to
evolve to foster competition by a broad range of players. It also stresses that the
existing regulations should be modified to reduce the cost of entry and provide scope
for business model innovation.
 28

CHAPTER 4

Data Analysis , interpretation and

Presentation.
 29

4.1 Primary data

1.) Age:

Below 20
20-30
40 Above

Table 1.1 Age

Age group Frequency Percentage

Below 20 6 20%
20 – 40 22 73%
40 Above 2 7%
Total 30 100%

Figure 1.2: Age

80

70

60

50

40

30

20

10

0
Below 20 20 - 40 40 Above

Age Group

Interpretation :

From table and diagram, The Age of 20-30 i.e. 63% are young generations and know
the use of technology and other things on how to get cash-backs and offers and they
always do most of the work through wallets .The 20% of them i.e. teenagers are
slowly getting the use and benefits of the wallets also. The 17% are working and
mostly do all important payments on water bills ,etc.
 30

2.) Qualification :

10TH (S.S.C)
12Th (H.S.C)
Degree (Graduate)
Post Degree (Post Graduate)

Table 2.1 Qualification

Qualification Frequency Percentage

S.S.C 3 10%
H.S.C 10 33%
Graduation 17 57%
Post-Graduation 0 0%
Total 30 100%

Figure 2.2: Qualification

60

50

40
Percentage

30

20

10
0

0
S.S.C H.S.C Graduation Post Graduate

Interpretation:

From the following diagram and the table more than 57% are Graduated and are from
working class .

10% are just 10th pass and 33% are 12th pass They are just studding and perusing
other goal and also qualified.
 31

3.) Gender:

Male

Female

Table no: 3.1 Gender

Gender Frequency Percentage

Male 24 80%
Female 6 20%
Total 30 100%

Figure 3.2: Gender

Female
20%

Male
80%

Interpretation :

From the following drawing and table

 32

Around 80% are mostly male and the usage is more than the female users as
compared to males. And the Females users are less as compared to males than males.

We come to know that men are mostly involved in online transaction

4.) Do you have completed the KYC form required in the

application/app ?
Yes
No

Table No: 4.1 KYC

KYC Frequency Percentage

YES 18 60%
NO 12 40%
Total 30 100%

Figure 4.2: KYC

YES
40% NO

60%

Interpretation:

From the following table and diagram

 33

60% of the user’s haven given their KYC form (know your consumer) as it is
important for the verification of their residencies .

40% of the users are not given any KYC details.

5.) Do you required PAN number or AADHAR number for

registration/setting the account ?

YES

NO

Table No: 5.1 PAN/ Aadhar

Aadhaar/Pan Frequency Percentage

Given
YES 27 90%
NO 3 10%
Total 30 100%

Figur 5.2: PAN/Aadhaar

10%

YES
NO

90%

Interpretation:

From the above diagram and table

 34

Most of them (90%)are given their Aadhaar form as it was wildly given by ever
person and they think that it can’t be missed used so they feel safe. But the 10%
are still not given the details.

6.) Do you feel safe about the details that you are providing to
Payments bank ?

YES

NO

Table No: 6.1 Security

SAFTEY Frequency Percentage

YES 18 60%
NO 12 40%
Total 30 100%

Figure 6.2: Security

YES
40% NO

60%

Interpretation:

In the above diagram or the table form

 35

Shows that 60% feel safe on the security of the payment’s bank and also do trust
them.

Rest 40 % don’t feel safe on the security of the payments bank.

7.) Do you receive a discount ,rewards or any loyalties ?

YES

NO

Table No : 7.1 Discount, Loyalties

Discount Frequency Percentage

Loyalties
YES 16 47%
NO 14 53%
Total 30 100%

Figure 7.2 : Discount, Loyalties

YES
NO
47%
53%

Interpretation:
From the following data and Diagram
 36

We came to know that how many people are receiving cashbacks and
discounts which are why people are mostly using payments bank here we see
that only 47% get discounts/loyalties.
Rest 53% are not receiving any discount/loyalties .
8.) Do you feel convenient and useful to be used anywhere, anytime ?

YES

NO

Table No 8.1 Anywhere/Anytime

Anywhere/anytime Frequency Percentage

YES 23 77%
NO 7 23%
Total 30 100%

Figure no 8.2 : Anywhere/Anytime

23%

Yes
No

77%

Interpretation:
From the above table we come to know that
 37

77%of people feel convenient using it any time anywhere. 23% don’t fell it
convenient using it any time anywhere.
As JIO network the internet usage of the people in India has also increased.

9.) Do you receive any interest or charges (service charge / fees) on

using the application ?

YES

NO

Table No: 9.1 Interest / Charges

Interest/Charge Frequencie Percentage

s
YES 15 15%
NO 15 15%
Total 30 100%

Figure 9.2: Interest / Charges

YES
NO

50% 50%

Interpretation:
 38

From the above diagram and data, we can see that :

Users receive and sometimes don't received charges/interest. As it depends
upon the usage of the services and the user what he wants at a particular point
of time. Thus 50% of the people do not receive any charges and other 50% do
receive charges and interest
10.) Have you ever noticed benefits on using this service through
the application past versus now ?

YES

NO

Table No: 10.1 Benefits/Changes

Change/Benefits Frequencies Percentage

YES 18 60
NO 12 40
Total 30 100

Figure 10.2: Benifits/Changes

YES
40% NO

60%

Interpretation:

From the above data and diagram, We see that there is not much changes in the
services or anything regarding to the application to the wallet for 40% of them.
 39

The other 60% of them have noticed change and are mostly daily users and use
the app for various uses possible and also the customers of the payments bank.

11.) What type of bills do you pay using payment bank / payment
bank services ?

Electricity Water Fairs

Rent Mobile All of the above

Table No: 11.1 Types of bill

Bills Frequency Percentage

Electricity 12 40%
Water 0 0%
Fairs 2 7%
Rent 1 3%
Mobile 9 30%
All above 6 20%
Total 30 100%

Figure 11.2: Types of bill

Electricity
All of above 17%
28%

Fairs
8%

Rent
4%

mobile
42%

Interpretation:
 40

From the above diagram and data We see that 42% people use for mobile
28% people for all bills, 17% people for electricity, 9% for fairs, 4% for rent
0% for water bills.

Users use this type of bills mostly for payments.

12.) How did you hear about this payments bank ?

T.V. Poster Online Friends Family

Table No 12.1 Heard from

Heard about it Frequency Percentage

Tv 6 20%
Poster 1 3%
Online 12 40%
Friends 8 27%
family 3 10%
Total 30 100%

Figure no 12.2 : Heard from

Family
9%
Friends
28%

Online
40%

T.V.
20%
Poster
3%

Interpretation:

From the following figure and data

 41

We see that the users have got the app or the wallet from either friend or by
seeing the 3% poster , 22% T.V. , 45% online ,30% friends, family 10%.
And today advertisement is widely done for such things Mostly online as
youth are always using internet.

13.) Who provided you are payments banking service?

A bank mobile operator Don’t know

Table No 13.1 Provider

provider frequency Percentage

A bank 11 37%
Mobile operator 5 17%
Don’t know/not 14 46%
sure
Total 30 100%

Figure 13.2: Provider

A bank
37%
Not sure
46%

Mobile operator
17%
 42

Interpretation:
From the following diagram and data given
We came to know that the users 40% know that it is a bank.
37% say it’s a mobile operator who operates through mobile.
46% are not sure about it.
14.) How often do you make transaction?

Once several times week

monthly once occasionally

Table No 14.1 Transactions

Transactions Frequency Percentage

Once 4 13%
Several times 9 30%
Week 1 3%
Monthly once 7 23%
occasionally 9 30%
Total 30 100%

Figure 14.2 : Transactions

Once
13%
Occasionally
30%

Several Times
30%

Monthly One
23% Weeks
3%

Interpretation:
 43

From the following data and diagram

We come to know that in this area 30% use occasionally, 13% do once, 31%
several times ,23% do once a month, 3% of do weakly . It depends upon what
they do normally .

15.) Types of transactions you do most.

Airtime recharge fund transfer balance inquire

statement bill payment purchasing

Table No 15.1 Type of Transaction

Type of transact frequencies percentage

Airtime recharge 4 13
Fund transfer 8 27
Balance enquire 2 7
Bank statement 1 3
Bill payment 7 23
purchasing 4 13
total 30 100

Figure 15.2: type of transaction

Purchasing Airtime recharge

15% 15%

Bill payment
27% Fund transfer
31%

Bank statement
3% Balance inquiry
8%

Interpretation:
From the following data and diagram
 44

We found that all the users are making normal transaction which we use and
do in the normal bank and all the facility at your fingertips any time
anywhere.
27% bill payment, 15% purchasing 15% at time recharge yes 4% bank
statement 8% balance inquiry re 31% fund transfer.

16.) How much are you satisfied with the services offered by
them?

Highly Satisfied Satisfied Neutral

Dissatisfied Highly Dissatisfied

Table No 16.1 Services

Service offer by Frequency Percentage

them
Highly satisfied 6 20%
Satisfied 6 20%
Neutral 13 43%
Dissatisfied 3 10%
Highly dissatisfied 2 7%
Total 30 100
 45

45 Figure 16.2: Services

40

35

30

25
Percentage

20

15

10

0
Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied

Interpretation:
From the following diagram and data
We see that that 43% of the people are neutral 20% are satisfied and 20% are
highly satisfied, 10% re dissatisfied and 7% are highly dissatisfied .
17.) How much are you satisfied with the payment bank payment
method ?

Highly Satisfied Satisfied Neutral

Dissatisfied Highly Dissatisfied

Table No 17.1 Payment Method

Payment method Frequency Percentage

Highly satisfied 6 20%
Satisfied 5 17%
Neutral 13 43%
Dissatisfied 3 10%
Highly Dissatisfied 3 10%
Total 30 100%
 46

45 Figure 17.2: Payment Method

40

35

Percentage 30

25

20

15

10

0
Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied

Interpretation:

From the diagram and the data given We come to know that 43% of them are
neutral with payment method 20 and 17% are highly satisfied and satisfied
respectively . Rest 10 percent are not satisfied ,10% are highly dissatisfied.
18.) How much are you satisfied with the password that
application is protected on your phone or device?

Highly Satisfied Satisfied Neutral

Dissatisfied Highly Dissatisfied

Table No 18.1 Application Security

App password Frequency Percentage

Highly satisfied 3 10%
Satisfied 5 17%
Neutral 13 43%
Dissatisfied 6 20%
Highly dissatisfied 3 10%
Total 30 100%
 47

45 Figure 18.2: Application security

40

35

30

25
Percentage

20

15

10

0
Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied

Interpretation:
From the following Diagram and Data
We come to know that 43% are neutral about the application security.10% are
highly satisfied and 17% are satisfied 20% are dissatisfied and 10% are highly
dissatisfied about application security.
19.) How much are you satisfied with payment bank payment
security ?

Highly Satisfied Satisfied Neutral

Dissatisfied Highly Dissatisfied

Table No 19.1 Payment Security

App security Frequency Percentage

Highly satisfied 3 10%
Satisfied 7 23%
Neutral 12 40%
Dissatisfied 5 17%
 48

Highly dissatisfied 3 10%

Total 30 100%

40 Figure 19.2: Payment Security

35

30

25
Percentage

20

15

10

0
Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied

Interpretation:
From the following Data and Diagram, we come to know that
10% are highly satisfied, 23% are satisfied, 40% are neutral,17% are
dissatisfied,10% are highly dissatisfied about the bank payment security.
20.) How much are you satisfied with the saving bank account
open here ?

Highly Satisfied Satisfied Neutral

Dissatisfied Highly Dissatisfied

Table No 20.1 Savings Account

Service offer by Frequency Percentage

them
Highly satisfied 3 10%
Satisfied 7 23%
Neutral 12 40%
Dissatisfied 6 20%
 49

Highly dissatisfied 2 7%
Total 30 100%

40 Figure 20.2: Savings Account

35

30

25
Percentage

20

15

10

0
Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied

Interpretation:
From the following information we come to know that 40% of the users are
neutral, 10% are highly satisfied, 23% are satisfied, 2.% are dissatisfied, 7%
are highly dissatisfied with the savings bank opened here.

21.) How much are you satisfied with loans or advances given by
the payment bank ?

Highly Satisfied Satisfied Neutral

Dissatisfied Highly Dissatisfied

Loans/advances Table no 21.1

Service offer by Frequency Percentage

them
Highly satisfied 3 10%
Satisfied 4 13%
Neutral 16 53%
Dissatisfied 5 17%
 50

Highly dissatisfied 2 7%
Total 30 100%

60 Figure 21.2: Loans/advances

50

40
Percentage

30

20

10

0
Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied

Interpretation:

Almost 53% are neutral about the advances given by their payments bank. 10%
are highly satisfied and 10% are satisfied. 17% are dissatisfied and 7% are highly
dis satisfied about their loans given to them.

4.2 SWOT analysis of payment banks

Strength

Innovative business models.

Nation-wide and last mile coverage.
Large existing customer base.
Anywhere any time banking.
Lower servicing and lower acquisition cost.
 51

Weakness

Loss of business due to lack of network/internet.

Lack of awareness among people on last technology and products and
services.
Low margin business.
Limited products offering.
Security concerns

Opportunities

Immense potential for market expansion in rural areas.

Greater innovation will help to produce and offer unique products and
services.
Technology to help to offer right product to right customers at a right time.

Challenges

Intense competition to lower profits.

Cash dominated economy.
Technology inexperience and literacy constraints will lead to lower acceptance
of technology.
Lack of awareness.
Lower Customer loyalty.
Regulatory restrictions.

4.3 Findings of the study

1) Mostly working-class group are mostly using the app/payments bank.

2) The people using the bank are all qualified.

3) There are mostly males using of their payments bank.

 52

4) More than half of the people have given the payments bank KYC form.

5) More than half of the people have given the details for registration for account
setup.

6) Half of the people feel safe providing the details that are given to the payments
bank.

7) Half of the people never received any discount on using the app.

8) More than half the people are convenient using the app any time anywhere.

9) Half of the people have received charges using the application as the it depends on
the services.

10) Half of people have noticed benefits and have noticed changes using the payments
bank.

11) Half people use the app for mobile payments.

12) Most of the people have heard the app / payments bank through online.

13) Half of the people do not know who operates the payment bank .

14) People do transaction occasionally ,several times and also once a day/week.

15) Fund transfer/ bill payment/ air time recharge are mostly transaction they use or
do.

16) More than half of the people are satisfied with the services offered by them.

17) More than half of the people are satisfied with the payment bank payment
method.

18) More than half of them are satisfied by their password protecting their phone.

19) More than half of them are secured with the security of the payments bank.

20) More than half of them are using the savings bank account and are satisfied.

21) More than half of the people are satisfied with the loan provided by them.
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CHAPTER 5
Conclusion
 After detail study of policies and strategies adopted by Reserve Bank of
India, this central bank of the country is providing very innovative and
flexible financial services to its customers by all modes of innovation. But
still performance can be enhanced by means of customer satisfaction and
by handling customer's requirements in a more effective manner.
 The RBI has mainly focused on the innovative as promotion of lower
income group's welfare side and welfare of the society.
 The CSR policy of the bank is very innovative and very strategic nature up
an extent. But is observed that banks India are moving towards
sustainability through innovative service and flexible operations and
offerings
 Lastly, I would like to say that innovation can give the better success to the
banking sector. But provided it must an exemplary performance in gaining
customer and fulfilling the requirements of customers, and is the only way
of gaining success for a bank
 Due to ever-growing customers’ expectations for banking facilities what
will drive the bankers to work with creativity and passion, which
contributes to growth of cross sections of our society, and so the
challenges.
 Thus, Payment Banks promises to be a game-changer because of by using
the mobile platform to provide basic banking transactions through mobile
phones. The decision to license some of the country’s biggest corporate
and mobile telecom firms to start payment banks promises to be a similar
game-changer in India.

Suggestions
Financial literacy is a major concern, there should be free seminars conducted across
cities, especially in the under-banked and unbanked areas; which would increase
awareness among the people and also prove to be a great marketing strategy for the
payment banks as well. A two-way benefit.
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It is suggested that these Payment banks should also keep innovating new options to
make it easier for the customers according to their preferences.

Security is considered as a major limiting factor. There is leniency in Know Your

Customer (KYC) norms mainly to cater to the non-banking population. But it needs to
enhance its security protocols in the future in order to earn the trust of its customers.

Payment banks must maintain a fine balance between their costs and benefits.
Example: - Airtel payments bank offers 7.5% interest rate to attract customers, but
also charges high inter-banking transaction fees. Similarly, the investments of
payment banks are limited to government securities and fixed deposits, while they
cannot lend to the public. So, their net income is low when correlated with the high
volume (customers) and low margin (yield on investments) of doing business.
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Bibliography

Journal Article:

Kothari, C.R. (1992), “Research Methodology: Methods and Techniques”, New

Delhi, Wiley Eastern Ltd.

Chandarana, N. (2015). Payment Banks: A Need of Digital India. Abhinav

Publication , 4 (11).

Singh R (2003) : Profitability management in banks under deregulate environment,

IBA bulletin, No25

Singla HK (2008) : " financial performance of banks in India," in ICFAI Journal of

Bank Management No 7

Prashanta Athma (2000) , in his Ph D research submitted at Usmania University

Hyderabad, “Performance of Public Sector Banks A Case Study of State Bank of
Hyderabad, tried to evaluate the performance of Public Sector Commercial Banks
with special emphasis on State Bank of Hyderabad”

Goal (2015) : “Payment Bank: A New Landscape for Indian Banking Sector”

Kesavan (2015) in his study “To the Era of Payment Banks by Reserve Bank of India
with Specific Reference to Indian Banking Sector”

Pande (2015) in his work “Payment Banks – A Newer form of Banks to Foster
Financial Inclusion in India”

Sandanshive & Katdare (2015) in their paper “Analysis of In-principle License

Entities to Act as Payment Bank: Financial Inclusion Perspectives”

Chandarana (2015) in her paper “Payment Banks- A Need of Digital India”

Srinivasan & Subramanian (2015) in their paper “Payment Banks in India –

Demystified”

Vyas, Gaur & Singh (2016), “A case study on M-pesa”

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Websites:

https://www.firstpost.com/tag/payment-banks15 (25 FEB)

https://www.moneycontrol.com/news/business/economy/fino-payment-bank-wants-
to-be-the-d-mart-of-banking-focus-on-mass-market-chief-2264341.html (25 FEB)

https://www.businesstoday.in/money/banking/payments-bank-what-does-it-mean-for-
you/story/244995.html (25 Mar)

https://en.wikipedia.org/wiki/Payments_bank (25 FEB)

https://www.quora.com/What-are-the-advantages-a-payment-bank-offers-over-other-
banks (25 Mar)

https://www.quora.com/What-are-the-advantages-payment-banks-have-I-hear-a-lot-
of-saying-that-payment-banks-can-reach-everywhere-Can-someone-throw-light-on-
this-aspect (25 FEB)

https://www.thehindu.com/business/all-you-need-to-know-about-payment-
banks/article7561353.ece (25 FEB)

https://economictimes.indiatimes.com/wealth/personal-finance-news/how-to-make-
the-most-of-payments-banks/articleshow/55704502.cms (25 FEB)

www.insightsonindia.com. (1 FEB)

www.rbi.org (1 FEB)

www.businessdictionary.com (25 FEB)

https://www.business-standard.com/article/finance/can-payments-banks-live-up-to-
their-promise-115083101176_1.html (2 FEB)

https://www.ijser.org/researchpaper/Genesis-of-Payment-Banks-It-s-Stimulus-on-the-
financial-inclusion-in-India.pdf (5 FEB)
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