Payments Bank : Restriction
The Reserve Bank of India (RBI) recently imposed restrictions on Paytm Payments Bank Ltd (PPBL), following a system audit report and subsequent compliance validation report of external auditors.
- A payments bank is like any other bank but operates on a smaller scalewithout involving any credit risk.
- It was set up based on the recommendations of the Nachiket Mor Committee.
- Objective is to advance financial inclusion by offering banking and financial services to the unbanked and underbanked areas, helping the migrant labour force, low-income households, small entrepreneurs, etc.
- It is registered as a public limited company under the Companies Act 2013 and licensed under Section 22 of the Banking Regulation Act 1949.
- It is governed by a host of legislation, such as the Banking Regulation Act, 1949; RBI Act, 1934; Foreign Exchange Management Act, 1999, etc.
