Public or private, payment banks have not worked much in India. Aditya Birla Idea Payments Bank Ltd, which is a full service digital bank, has said it was winding up its operations.
India Post Payments Bank, too, is struggling to survive with mounting salary bills and scant business. Sources said the bank is awaiting the RBI nod for transformation . As a small finance bank, it can accept deposits of over Rs 1 lakh and advance loans.
Small finance banks are a type of niche banks in India. Banks with a small finance bank licence can provide basic banking service of acceptance of deposits and lending.
The Reserve Bank of India had issued guidelines for payments banks in November, 2014 for improving financial inclusion. Right from the beginning there were doubts about the viability of payments banks as the operations of these banks are very restricted. Though they are called banks, their functions are similar to those of deposit-taking companies.