Page 38 - Banking Finance March 2025

ARTICLE

Fintech Ecosystem

in India and

Impacts of Paytm

on RBI's Move Ranjit Kumar Ranjan

Chief Manager (Faculty)
Union Bank of India,
Union Learning Academy, Lucknow.

In today's scenario the wallet users as well as digital channel payment users are having bundle
of opportunity to avail services of various service providers and without hindrance they can enjoy
the benefits of digital payments.

A payments bank is a unique model of banking to propose measures for achieving increased access to
diversified financial services, expansion of rural banking and
conceptualized by the Reserve Bank of India. A
payments bank is like any other bank but
social & financial inclusion. The committee submitted its
operating on a smaller scale without involving
any credit risk. In simple words, it can carry out report to RBI in January 2014. One of the key suggestions
of the committee was to introduce specialised banks or
most banking operations but can't advance loans or issue "Payments Bank" to cater to the lower income groups and
credit cards. It can accept demand deposits in the form of small businesses.
saving and current account up to Rs 2 lakh. In no
circumstances the payment bank can accept term/time Based on committee recommendations, RBI worked on
deposit. that, and Airtel Payment bank became the first bank in the
unique model of banking. Latter many other entities like
The payment bank offer remittance services, mobile India Post Payment Bank, Fino Payment Bank, Paytm
payments/transfers/purchases and other banking services Payment Bank and so on received such license.
like ATM/debit cards, internet banking and third-party fund
transfers. The payment banks are allowed to invest the Paytm Payment Bank
money received from customers to government securities. Paytm is an acronym of "Pay Through Mobile". Paytm was
Further the payment bank cannot open or set up subsidiaries founded in August 2010 and Paytm Payment Bank came into
to undertake NBFCs activities. existence on getting licence from RBI on 28th November 2017.

In September 2013, the Reserve Bank of India constituted 8 November 2016, a remarkable day in the Indian financial
a committee headed by Dr Nachiket Mor to study system. The Government of India announced the
"Comprehensive financial services for small businesses and demonetisation of all Rs. 500 and Rs. 1000 bank note of
low-income household"'. The objective of the committee was Mahatma Gandhi Series. This post demonetisation gives a

34 | 2025 | MARCH | BANKING FINANCE