Payment banks and SFBs can join payment systems only after final licence: RBI

The Reserve Bank of India (RBI) has said that entities that received in-principle approval for setting up payments banks and small finance banks (SFBs) can join any payment system only after getting the final licence.

The central bank in its statement said that entities that have been granted in-principle approval by it for setting up payments banks and SFBs, can apply to the RBI for membership of any centralized / decentralised payment systems, including Bharat Bill Payment System, after receiving the licence for commencement of business under the Banking Regulation Act, 1949.

RBI Deputy Governor R Gandhi has said that the Reserve Bank is working on the next payment system vision document, which will cover what are the developmental initiatives the RBI should be encouraging the industry to do.

The central bank, in August and September, announced the names of 21 entities that were granted in-principle approval for setting up payments banks and SFBs. The ‘in-principle’ approval is valid for 18 months during which time the applicants have to comply with all requirements stipulated by the RBI before grant of final licence for commencement of banking business.