Small Bank And Payment Bank

	Payment Banks	Small banks
What they can do	Offer Internet Banking Sell Mutual Funds / Insurance / Pensions Offer Bill Payment Service Have ATMs & BCs Can function as BC of other Banks	Sell forex to customers Sell Mutual Funds / Insurance / Pensions Can convert into a full - fledged bank Operate across the country
What they can't do	Offer Cridit Crads Extend Loans Handle Cross Remittances Accept NRI Deposits	Grant Large Loans Float subsidiaries Can't sell complicated financial products
Eligibility Criterion	Issuer of Pre - Paid Cards, Telecom Companies, NBFCs, Banking Companies, Super Market Chain, Real Estate, Companies, PSUs Minimum Capital Rs. 100 Crores 75% Capital must be inve G - Sec.	Individuals / Pofessionals with equal to or than 10 years of experience, NBFCs, Micro Organization and Local Area Banks Minimum Capital Rs. 100 Crores 75% Lending in PSL
Other Provisions	25% Deposits in Other Banks Min. 26% Investment from Indians Compulsory Listing on a recognized stock exchange as net worth exceeds Rs. 500 Crores Maximum Balance Limit in an account is Rs. 1 Lakh Compulsory to adopt technological and networking solutions for operations Minimum capital requirement - 15%	Compulsory to comply with reserve system Individual borrowings are eligible up to 10% and organizational borrowings are eligible up to 15% of the total assets Will provide BFs facility 25% branches in non - banking rural areas.

RBI had received 142 application for payment banks and 71 application for small banks.

A preliminary scrutiny of all the applications involving prima facie eligibility including the ability to raise the minimum initial capital and the status of ownership and control by residents as per the Guidelines was carried out by the RBI team. The findings of the preliminary scrutiny were presented to an External Advisory Committee (EAC) constituted under the Chairmanship of Smt. Usha Thorat, former Deputy Governor of the RBI. The EAC recommended applications to be taken up for detailed examination based on prima facie eligibility vis - à - vis the Guidelines.

The detailed scrutiny involved assessment of financial soundness, proposed business plan, fit and proper status based on due diligence reports received from the regulators, investigative agencies, banks, etc.

An important factor was proposed reach into unbanked areas and underserved sections of the population. The EAC held detailed discussions in multiple sittings on the applications based on the information presented to it. The EAC then submitted its recommendations to the RBI.

An Internal Screening Committee (ISC), consisting of the Governor and the four Deputy Governors of the RBI thereafter examine the applications. The ISC also deliberate on the rationale of the recommendations made by the EAC. After scrutinising all the applications, the ISC made its independent recommendations to the Committee of the Central Board (CCB) of the RBI.

Based on the recommendations the RBI in August 2015 gave tentative sanction to the following 11 PAYMENT BANKS-

1. Aditya Birla Nuvo 2. Airtel M Commerce 3. Cholman-dalam Distribution 4 Department of Posts 5. Fino Pay Tec 6. National Securities Depository Limited 7 Reliance Industries 8 Sun Pharma 9. Paytm 10. Tech Mahindra 11. Vodafone Mpesa

Note: Out of the above, three companies have withdrawn namely Cholmandalam Distribution, Sun Pharma and Tech Mahindra as on 25/05/2016

In September 2015 RBI has issued in principle approval to 10 SMALL FINANCE BANKS as follows.

1. Au Financiers (India) Ltd., Jaipur. 2. Capital Local Area Bank Ltd, Jalandhar. 3. Disha Microfin Private Ltd., Ahmedabad.

4. Equitas Holdings P Limited Chennai.

5. ESAP Microfinance and Investments Private Ltd., Chennai.

6. Janalakshmi Financial Services Private Limited Bengaluru.

7. RGVN (North East) Microfinance Limited, Gowahati.

8. Suryoday Micro Finance Private Ltd, Navi Mumbai.

9. Uijivan Financial Services Private Ltd, Bengaluru.

10. Utkarsh Micro Finance Private Ltd. Varanasi.