NSDL commences operations as a payments bank, says RBI

In November 2014, the RBI had granted 'in-principle' approval to 11 applicants to set up payments banks

NSDL Payments Bank has commenced operations as a payments bank, the RBI said Monday.

In November 2014, the RBI had granted 'in-principle' approval to 11 applicants, including National Securities Depository Ltd (NSDL) to set up payments banks.

Of these, Airtel Payments Bank, India Post Payments Bank, FINO Payments Bank, Paytm Payments Bank, Aditya Birla Idea Payments Bank and Jio Payments Bank, are already in operation.

These niche banks can accept demand deposits, and issue ATM/debit cards, among other activities.

Payments banks, however, cannot issue credit cards, and undertake lending activities.

Established in August 1996, NSDL is the first and the largest depository in India. It provides bouquet of services to end investors, stock brokers, stock exchanges, custodians, issuer companies etc through its network of more than 260 depository participants / business partners.

In another notification, the RBI said Payments Banks and Small Finance Banks are eligible to participate in the Call/Notice/Term money market both as borrowers and lenders.

Such eligibility is valid even prior to the completion of the process to get themselves included in the second schedule of Reserve Bank of India Act, 1934, it added.