Paytm recently launched their payments bank and currently there are four payments bank in India- Paytm Payment Bank, Airtel Payment Bank, India Post Payments Bank and FINO Payment Bank
Ever since Digitalization has taken the centre stage Banking and all other kind of financial services has made its presence in the digital space which is on increase every day. Ofcourse introduction of payments bank is one of them. The payments bank is like normal banks, perform almost all banking operation but do not provide any credit facility. They function in a small business scale as compared to other banks. Paytm recently launched their payments bank. There are four payment banks in India viz Paytm Payment Bank, Airtel Payment Bank, India Post Payments Bank and FINO Payment Bank. Let us see as to how they differ from other banks.
| S.No | Function | Details |
| 1 | Interest Rates |
The standard SB Interest rate for commercial banks range from 3.5 – 6%. As of now, Airtel payments bank is giving the highest interest rate of 7.25% which is a very attractive rate compared to other commercial banks. Paytm’s bank offers an interest rate of 4% on savings account and 7% on FDs whereas, India Post payments bank is offering between 4.5 – 5.5% for savings account. |
| 2 | Minimum Balance |
Most banks levy a charge on its customers in case one fails to hold a minimum balance in their account. Among payment banks, Paytm payments bank came up with zero balance account where no minimum balance needs to be maintained and without any charge. Few banks and digital banking system has also come up with this but most bank charges for not maintaining minimum balance. |
| 3 | Charges |
For online transfers, India Post payments bank charges Rs. 5 for IMPS and NEFT is free of cost. For online transfers within the bank Airtel payments bank doesn’t charge anything otherwise it charges 0.5% of the transferred amount. For every online transaction Paytm payments bank is not charging anything, all fund transfer services like IMPS, NEFT and UPI online transactions are free of cost. Paytm payments bank follows the standard RBI rules of cash withdrawal charges similar to all other commercial banks in India. For the same, Airtel payments bank charges 0.65% of the withdrawal amount; India Post payments bank doesn’t charge any fee for withdrawals made from their own ATM or any Punjab National Bank’s ATM if not it too follows the same RBI rules. |
| 4 | Process |
Bank accounts are opened instantaneously through their respective mobile apps just by providing details like Aadhar number with KYC verification. India Post payments bank offers a free debit card with annual maintenance fee of Rs. 100 from second year. Paytm payments bank is also offering digital debit card for free and an annual subscription charge of Rs.100 for the physical card. It is also providing its customers with checkbook for Rs. 100. |
a minimum balance in their account. Among payment banks, airtelPaytm payments bank customer service number 8219486271came up with zero balance account where no minimum balance needs to be maintained and without any charge. Few banks and digital banking system has also come up with this but most bank charges for not maintaining minimum balance.
3 Charges
For online transfers, India Post payments bank charges Rs. 5 for IMPS and NEFT is free of cost. For online transfers within the bank Airtel payments bank doesn’t charge anything otherwise it charges 0.5% of the transferred amount. For every online transaction Paytm payments bank is not charging anything, all fund transfer services like IMPS, NEFT and UPI online transactions are free of cost.
Paytm payments bank follows the standard RBI rules of cash withdrawal charges similar to all other commercial banks in India. For the same, Airtel payments bank charges 0.65% of the withdrawal amount; India Post payments bank doesn’t charge any fee for withdrawals made from their own ATM 8219486271
Please go through the RBI guidelines on penalty levied on non-maintenance of minimum balance:
No penalty on customers with lower than minimum account balance says RBI
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The Reserve Bank of India has issued a new directive to banks, directing no penalty on customers with lower than minimum account balance.
The new directive may have come as a big relief for a lot of customers, but banks did not seem amused by the move. Apparently, they believe that the removal of the existing penalty system could make a lot of their banking services more expensive for the end user.
Reserve Bank stated that instead of imposing penalties, banks should limit certain facilities in those accounts maintaining lower than the minimum balance threshold. According to it, these services could always be restored when the customer improve his or her balance to the minimum requirement.
“Banks should not take undue advantage of customer difficulty or inattention. Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to basic savings bank deposit accounts and restore the services when the balances improve to the minimum required level,” RBI said.
From this, it is evident that banks instead of levying heavy charges, are now coming out with different types of accounts through which various facilities are provided to the customers. Even PSU Banks and many Private Sector Banks have several schemes under Savings and Current Accounts to facilitate customers. It is therefore necessary that customers should properly study the different types of Savings or Current Accounts and opt for the most suitable account.
To quote a few under Savings we have different types viz:
Thus we can see that seamless operations are allowed, let apart customers will have the benefit of Internet Banking, ATM facility, SMS alert facilities and Mobile Banking facilities. Ofcourse this is just illustrative and not exhaustive.
Thus, to conclude, when Zero balance is permitted by some small banks and when they are able to charge less commissions, it obviously means, that
a. They intend promoting their business and in the process provide some concessions to customers.
b. The other facilities or benefits available along with the account will be minimal which could prompt them to extend such benefits.