A total of 11 payment banks and 10 small finance banks were granted license from the Reserve Bank of India (RBI) to start banking operations in India, in a move to help expand the outreach of Atal Pension Yojana (APY), the government's pension scheme.
Payment banks and small finance banks are a new model of banking conceptualized by the RBI.
Given the strength of the bank, expertise and its reach, these kinds of banks are expected to play a pivotal role in expanding the outreach of subscribers under the APY, the government said on Friday.
Participation in the APY not only builds a pensioned society but also adds sustainable fee income to banks by way of attractive incentive for mobilizing APY at Rs 120-150 for each account, an official notification from the Ministry of Finance said.
In order to familiarise these small finance banks and payment banks in the APY, the Pension Fund Regulatory and Development Authority (PFRDA) had conducted an orientation meeting on January 15 and discussed the implementation of schemes in these banks.
Among the chosen entities, the small finance banks that are currently operational under the aforementioned initiative are Ujjivan Small Finance Bank, Janalakshmi Small Finance Bank, Equitas Small Finance Bank, A U Small Finance Bank, Capital Small Finance Bank, ESAF Small Finance Bank, Utkarsh Small Finance Bank, Suryoday Small Finance Bank and Fincare Small Finance Bank.
Meanwhile, Paytm Payment Bank, Airtel Payment Bank, India Post Payment Bank and Fino Payment Bank are currently operating under the scheme.
On a related note, the APY is an old age pension scheme being implemented through all banks across the country as per the mandate received from the Ministry of Finance and monitored periodically at the Prime Minister's Office.
This social security scheme was launched on May 9, 2015, by Prime Minister Narendra Modi.
As on January 23, 2018, there are more than 84 lakh subscribers registered under the APY scheme, with an asset base of more than Rs 3,194 crore.