Banking Awareness -Important point about Small and payments bank

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Here we are going to talking about small bank and payment bank

Some similar point uses in both banks: Small banks and payment banks:

Inclusion

  • In case of Small banks and payments bank, The Minimum capital requirement would be Rs.100 cr.
  • Foreign Shareholding in small and payments banks will be as per current FDI Policy
  • Voting rights to be line with the existing guideline for private banks
  • In these banks, Entities other than promoters will not be permitted to have shareholding in excess of 10 percent.
  • These bank should comply with the corporate governance guidelines, including ‘Fit and proper’ criteria for Directors as issued by Reserve bank of India.
  • Operation of the bank should be fully networked and technology driven from the begging

Small bank:

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  • The main purpose of small banks will be provide a whole suite of basic banking products such as deposit and supply of credit, but in limited area of operation.
  • Objectives for theses bank small banks to increase financial inclusion by provision of saving vehicles to under-served and unserved  section of population, supply of credit to small farmers and micro and small industries.
  • If you are start small bank, it must resident individuals with 10 yr of experience in banking and finance, companies and societies will be eligible as promoters to set up small banks. In case of small banks, NBFC, micro finance institution (MFIs) and local area bank (LABs) can convert their operation into small banks.
  • Branch expansion for the initial three years, prior approval will be required
  • The small bank shall primarily undertake basic banking activities of accepting deposit and lending to small farmers, small business, micro and small industries, and unorganized sector entities.

Payment bank:

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  • Payment bank is to increase financial inclusion by providing small saving account, payment/remittance service to migrant labour, low income households, and small business.
  • Payment bank can be a non –bank PPIs, NBFCs, Corporate, Mobile telephone companies, super market chain real sector cooperative companies and public sector bank. It can take equity in payment banks.
  • It can be accepted demand deposit only current account and saving account. Payments banks would initially be restricted to holding a maximum balance of Rs.1 lac per customer.
  • Payments banks can offer payment and remittance services, issuance of prepaid payment instruments, internet banking for other banks.
  • They cannot setup subsidiaries to undertake NBFC Business.
  • Payment banks would be required to use the word “payment ‘it is named to differentiate it from other banks.
  • There will be no Credit Lending is allowed for payments banks.

Difference between Small bank and payment bank:difference between small bank and paymnet bank

All about Kisan Vikas Patra Scheme- KVP Features and Liquidity

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Kisan Vikas Patra is saving scheme that was issued by the government of India that doubles money within Eight Years and four months’ time period. The Directorate of small Saving Government of India that sells these saving bonds through all post offices in the country so that the scheme can be accessed by citizens from all over the country. Kisan Vikas Patra can be enchased after two and half years from the date of release at the value it has been bought and the interest accrued for the period.

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Important facts about KVP:

  1. In case of Kisan Vikas Patra Scheme, The Invest amount would get doubled in 100 months or 8 years and four months.
  2. So, Investor would not get any tax benefit for their investment in Kisan Vikas Patra unlike PPF. KVPs would be giving a return of 8.7 % annually.
  3. In case of Kisan Vikas Patra certificates would be provide in the denominations of Rs. 1000, 5000, 10000 and 50, 000 and there will be no upper limit in case of KVPs.
  4. KVP Certificates can be encashed after a Lock-in period of 30 months or 2 years and 6 months , so investor can withdrawal in any block of six months.
  5. KCP Certificates can be released in single or joint names; it can be transfer one person to other persons many times.
  6. In case of KVPs, the facilities of transfer from one post office to another post office anywhere in India and of information will be available.
  7. KVPs Certificates can also pledged as security to avail loans from the banks.
  8. In earlier, KVP Certificate will be sold through post office, but now it will be made available to the through designated branches of nationalized banks.

Some features of new KVP Scheme in brief:

  • Interest – 8.7 percent
  • Time period – 8 years and four months
  • Investment amount will be doubled in 100 months
  • In case of KVP scheme, Minimum Lock-in period two years and six months.

Liquidity of KVPs:

  • KVPs Certificates can be encashed in eight equal monthly installments after lock-in period
  • KVP Certificate can be transferred to another person by endorsement and delivery
  • KVP Certificate can also be given as collateral for loans by banks
  • In case of KVP, Minimum investment Rs.1000. thereafter in denominations of Rs.5000, Rs. 10000and Rs.50000. There will be no maximum limit.
  • Fully taxable
  • Way of investment –Cash or Cheque
  • In Case of KVPs, Known your customer (KYC) norms: PAN card not required but identity and address proof required.