Payment Bank License in India
Launch Your Digital Bank with Marcken Consulting 🚀
Start Your Payment Bank Journey with the Experts in RBI Licensing & Digital Banking Compliance! 💼
What is a Payment Bank? 🏦
The Reserve Bank of India (RBI) created a new class of banks called Payment Banks to promote financial inclusion. These banks offer essential services like deposits, digital payments, remittance, and utility bill payments, especially to underserved communities.
Payment banks are not able to provide credit cards or loans like typical banks, however, they can:
- Open savings and current accounts (up to ₹2 lakh)
- Issue ATM/debit cards
- Provide internet and mobile banking
- Distribute insurance, mutual funds, and other third-party products.
Ready to make an impact in India's booming finance sector?
Why Start a Payment Bank in India? 💰
With India’s booming digital economy and widespread UPI adoption, Payment Banks are perfectly positioned to serve:
✅ Migrant workers
✅ Low-income households
✅Small businesses
✅ Rural and semi-urban populations
Low operational costs, a digital-first model, and strong RBI support make it a golden opportunity for startups, NBFCs, telecom companies, and corporates.
RBI Requirements for Payment Bank License Eligibility 📋
🔹 Minimum ₹100 crore paid-up capital
🔹 Promoter's contribution: 40% locked in for 5 years
🔹 Investment Company (IC)
🔹Maintain CRR as per RBI norms
🔹Government securities accounted for 75% of demand deposits.
🔹Leverage Ratio: Capped at 3%
🔹Foreign investment in private banks is allowed under the FDI policy.
🔹Eligible applicants include:
- NBFCs and Microfinance Institutions
- Telecom companies
- Corporate business houses
- Individuals/groups with sound financial backgrounds
Permitted Activities for Payment Banks ✅
✅ Accept deposits up to ₹2 lakh
✅ Offer savings and current accounts
✅ Issue debit/ATM cards
✅ Enable mobile and internet banking
✅ Conduct domestic remittances
✅ Distribute insurance and mutual funds
✅ Facilitate bill payments and recharges
Prohibited Activities:
❌ Issuing loans
❌ Offering credit cards
❌ Issuing cheque books
Step-by-Step Guide to Payment Bank License Applications 🛠️
✅ 1. Consultation & Strategy Formation 📞
Understand your business model and set up a clear roadmap.
✅ 2. Prepare a 5-Year Business Plan 📈
Cover technology, governance, projections, and market strategies.
✅ 3. File the Application with RBI 📝
Submit detailed documentation and annexures as required.
✅ 4. RBI Evaluation & Due Diligence 🔍
RBI will examine and could request clarifications.
✅ 5. Obtain In-Principle Approval 🏆
Valid for 18 months to meet the pre-license criteria.
✅ 6. Compliance & Final Licensing 🎯
After meeting all RBI conditions, the final license will be granted.
🎯 Want this done without the stress?
Required Documents for a Payment Bank License 📄
✔ 5-year business plan
✔ Company incorporation certificates
✔KYC and financials of promoters/directors
✔ Net worth certifications
✔Risk Management & IT Security Policies
✔ Organizational chart and board resolutions
✔ Compliance declarations
Why Choose Marcken Consulting for Your Payment Bank License? 🌟
✅ Eligibility assessment and structure advisory
✅ Business plan preparation and documentation
✅ End-to-end RBI application support
✅ Technology and compliance setup guidance
✅ Post-licensing handholding and advisory
👉 We simplify complexity, so you can focus on launching your digital bank!
Key Benefits of a Payment Bank License 🎯
✔️ Low Infrastructure Cost – Digital-first model, minimal physical branches
✔️ Huge Market Potential – Over 190 million unbanked Indians
✔️ Recurring Revenue Streams – Earn from commissions, wallet usage, and transactions
✔️ Faster Scalability – Lower operational costs, higher reach
✔️ Government Backing – Initiatives like UPI, DBT, and Jan Dhan Yojana support growth.
Challenges to Be Aware Of ⚠️
⚡ Strict Regulatory Oversight – Vigilant RBI compliance and monitoring
⚡ High Tech Investment – Secure digital infrastructure is a must
⚡ Complex KYC and Fraud Management – Need robust onboarding systems
⚡ Limited Revenue Options – No lending or credit services allowed.
Frequently Asked Questions
How long does it take to get a Payment Bank License from the RBI?
📝 Typically, the process takes 6 to 12 months after applying. This duration depends on how quickly compliance documents are ready and how smoothly the RBI review process goes. Timely responses to RBI queries can expedite approvals.
Can an NBFC apply for a Payment Bank License?
📝 Yes, NBFCs with solid financials and a strong track record in financial services are eligible to apply. They must meet the RBI’s capital requirements and governance standards to secure the license successfully.
How much money can a consumer deposit at a Payment Bank?
📝 As per RBI regulations, a Payment Bank can hold a maximum deposit of ₹2 lakh per customer. This limit helps in risk management while promoting safe banking practices for the underserved segments.
Are credit cards and loans available from Payment Banks?
📝 No, Payment Banks are not authorized to lend money or offer credit cards. Their primary function is to promote deposits, remittances, bill payments, and the distribution of third-party financial products.
Is foreign investment permitted in Payment Banks?
📝 According to India’s private bank FDI policy, foreign investment is permitted. However, investors must comply with RBI guidelines and seek the necessary approvals before investing in Payment Banks.
👉Get Your License Now!
