Get Your Payments Bank License with eFileSeva | We Help You Do It Right!
A Payments Bank is a differentiated bank governed by Section 22 of the Banking Regulation Act, 1949 and RBI's Guidelines for Licensing of Payments Banks (2014). A valid licence requires a public limited company with minimum paid-up equity capital of ₹100 crore, a fit-and-proper promoter holding at least 40% for the first five years, an application assessed by RBI's External Advisory Committee, and an in-principle approval valid for 18 months within which the bank must be set up. Payments banks may accept demand deposits (up to ₹2 lakh per customer) and offer remittances — but cannot lend or issue credit cards, and must invest at least 75% of demand-deposit balances in Government securities with up to 25% in other scheduled commercial banks. eFileSeva helps promoters get licensed legally and compliantly — from eligibility assessment and company incorporation to the RBI application, in-principle approval milestones, and final licence.
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Key Details for a Payments Bank License
eFileSeva provides complete assistance for a payments bank licence — eligibility assessment, promoter and capital structuring, company incorporation, the RBI application dossier, in-principle approval milestones, and the final licence and launch — across all promoter profiles and RBI's differentiated-bank frameworks.
| # | Topic | Details |
|---|---|---|
| 1 | Choose the Right Route | Selecting the correct route is the first step — a full payments bank licence under Section 22 of the Banking Regulation Act, 1949, a Small Finance Bank (SFB) licence for lending-oriented models, a Prepaid Payment Instrument (PPI) authorisation for wallets, or a Business Correspondent partnership where a non-bank wants distribution without a bank licence. eFileSeva helps you choose based on your objectives and capital capacity. |
| 2 | Licensing Timeline |
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| 3 | Licensing Cost | The cost comprises company incorporation fees (a public limited company registered as "… Payments Bank Ltd."), professional fees for the application and the EAC process, and the ₹100 crore minimum paid-up equity capital. RBI charges no application fee. eFileSeva provides transparent pricing with no hidden charges and phased milestones. |
| 4 | Business Model & Deposit Cap | A payments bank accepts demand deposits (savings and current accounts) up to a maximum of ₹2 lakh per customer (raised from ₹1 lakh in April 2021), issues debit/ATM cards, offers remittances and bill payments, and distributes mutual funds, insurance and pension products. It cannot lend and cannot issue credit cards. |
| 5 | Investment & Prudential Norms | At least 75% of demand-deposit balances must stay in Government securities / T-bills with maturity up to 1 year (SLR-eligible), with a maximum of 25% in current and time deposits with other scheduled commercial banks. The bank must also maintain CRR as applicable, a CRAR of at least 15% of risk-weighted assets, and a leverage ratio of not less than 3%. |
| 6 | Key Law & Guidelines | Section 22 of the Banking Regulation Act, 1949 (bank licensing), the Guidelines for Licensing of Payments Banks (2014) for the statutory framework, the Companies Act, 2013 for incorporation, and — for the wallet side — the Payment and Settlement Systems Act, 2007 (PPI authorisation). |
| 7 | Distribution & Technology Obligations | A payments bank must be fully networked and technology-driven from day one, operate 25% of its branches in unbanked rural areas, use the term "Payments Bank" in its name, and maintain a high-powered customer grievance cell. It may act as a Business Correspondent of another bank and issue prepaid instruments. |
| 8 | Post-Licence Services |
After the final licence, eFileSeva assists with:
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*Timelines may vary depending on application completeness, RBI's review cycle, and promoter readiness.
Payments Bank License in India: Everything You Need to Know
Get Your Payments Bank Licensed Legally & Compliantly
A Payments Bank is a differentiated, narrow-purpose bank introduced by RBI following the Nachiket Mor Committee's recommendations (2013-14) to drive financial inclusion. Under Section 22 of the Banking Regulation Act, 1949, a payments bank is licensed as a public limited company under the Companies Act, 2013 — the word "Payments Bank" must appear in its name — and may accept demand deposits up to ₹2 lakh per customer, issue debit cards, offer remittances and bill payments, and distribute third-party financial products.
The Guidelines for Licensing of Payments Banks (November 2014) prescribe the conditions: minimum paid-up equity capital of ₹100 crore, a fit-and-proper promoter with a sound track record (typically 5+ years of running a business in a relevant field), a minimum 40% promoter contribution held for the first five years (phased down towards 26% within 12 years), and foreign shareholding per the FDI policy for private sector banks. The application is submitted to RBI, screened for prima facie eligibility, and assessed by an External Advisory Committee (EAC); on clearance RBI issues an in-principle approval valid for 18 months, within which the bank must complete incorporation, capital, technology and branch requirements and obtain the final licence.
The model is intentionally restricted: a payments bank cannot lend or issue credit cards, and must invest at least 75% of demand-deposit balances in Government securities or T-bills (up to 1 year) with up to 25% in deposits with other scheduled commercial banks. It must maintain CRR and a CRAR of at least 15%, a leverage ratio of not less than 3%, a fully networked, technology-driven operation from day one, and 25% of branches in unbanked rural areas. Compliance discipline is paramount — RBI's cancellation of the Paytm Payments Bank licence in April 2026 (under Section 22(4), citing continued non-compliance and governance concerns) underlined that licences earned through rigour can be lost through laxity.
eFileSeva helps you assess eligibility, structure the capital and promoter holding, incorporate the bank, build the application dossier, navigate the EAC process, complete the in-principle milestones, and set up the prudential and compliance framework — making your payments bank licence simple, fast, and fully compliant.
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"eFileSeva made our payments bank licensing journey quick, transparent, and stress-free. Their experts handled the application, EAC interaction, and compliance setup professionally and kept us informed throughout."
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Disclaimer
eFileSeva is a professional corporate compliance consultancy and service provider. We are not the Reserve Bank of India, the Ministry of Corporate Affairs, or the Registrar of Companies and do not grant banking licences or issue approvals. All licences, in-principle approvals, registrations and acknowledgements are issued solely by the RBI, MCA, ROC, and the respective government authorities. Our role is to assist clients with consultation, documentation, application filling, and end-to-end process support.
Routes to a Payments Business
Each route into the payments and deposits business serves a different objective and carries distinct rules. The correct route depends on your capital capacity, distribution network, and appetite for regulation. eFileSeva helps you identify the correct route and complete the process with expert guidance.
Payments Bank Licence
The differentiated bank route under Section 22, Banking Regulation Act, 1949 — ₹100 crore capital, deposits up to ₹2 lakh per customer, remittances and debit cards, with no lending. The strongest licence for deposit-taking payment services.
Learn MoreSmall Finance Bank (SFB)
The lending-focused differentiated bank — ₹100 crore capital (₹200 crore for applicants with other group entities), no deposit cap, but 75% of Adjusted Net Bank Credit must go to priority-sector lending. Choose this where credit products are the core of the model.
Learn MorePrepaid Payment Instrument (PPI)
The wallet route under the Payment and Settlement Systems Act, 2007 — authorised by RBI's Department of Payment and Settlement Systems (DPSS) with a minimum paid-up capital of ₹25 crore (₹5 crore for small PPIs). No bank licence, no deposits — lower capital, lighter regulation.
Learn MoreBusiness Correspondent (BC)
The agent route — a non-bank entity (or a payments bank) acting as the Business Correspondent of a scheduled commercial bank or payments bank, for customer onboarding, deposits, and remittances under the RBI's BC guidelines. The lowest-capital distribution model.
Learn MorePartnership with an Existing Bank
Where a full licence is not viable, co-branding, partner models, or BaaS (Banking-as-a-Service) arrangements with existing payments banks and scheduled banks let a fintech offer accounts and payments — subject to the bank's consent, RBI's outsourcing/IT-guidance, and the sponsor's compliance.
Learn MoreInvestment / Acquisition Route
With six payments banks licensed to date (Airtel, India Post, Fino, Jio and NSDL operating; the Paytm Payments Bank licence cancelled on 24 April 2026), acquiring or investing in an existing licensee — with RBI's prior approval for the change in shareholding — is the fastest route to an operating banking business.
Learn MoreNot Sure Which Route Applies to Your Payments Business?
eFileSeva's experts will help you choose the most suitable route based on your capital capacity, distribution network, and the regulatory depth you are prepared for.
Get Free ConsultationEligibility / Minimum Requirements
Before applying for a payments bank licence, you must meet a few basic eligibility and procedural requirements. eFileSeva helps you verify these requirements and complete the licensing process without delays.
Public Limited Company with "Payments Bank" in its Name
The bank must be a public limited company registered under the Companies Act, 2013, and must use the term "Payments Bank" in its name to distinguish it from other banks. An existing company must be converted or a new one incorporated before the final licence.
Minimum Paid-up Equity Capital of ₹100 Crore
The minimum paid-up equity capital is ₹100 crore, and the bank must maintain a CRAR of at least 15% of risk-weighted assets (Tier-I at least 7.5%) and a leverage ratio of not less than 3% — subject to any higher norms RBI may prescribe.
Fit-and-Proper Promoter with 40% Stake
The promoter/promoter group must be fit and proper, with a sound track record — typically at least five years of relevant business experience — and must contribute a minimum of 40% of paid-up equity capital for the first five years (phased to 30% by year 10 and 26% by year 12). Every director must meet RBI's fit-and-proper criteria.
Business Plan, Technology & Branch Commitment
A detailed business plan — the acquisition and remittance strategy, 5-year financial projections, technology architecture, and risk framework — is required, along with a commitment that 25% of branches will be in unbanked rural areas and that operations will be fully networked and technology-driven from day one.
KYC/AML, Grievance & Governance Framework
A board-approved KYC/AML policy, a high-powered customer grievance cell, a governance structure with independent directors and committees, and prescribed policies on IT security and outsourcing must be in place for both the application and the licence.
Foreign Investment per Private Bank FDI Policy
Foreign shareholding in a payments bank is permitted as per the FDI policy for private sector banks as amended from time to time, including the prescribed ownership and control conditions, and requires compliance with FEMA reporting. The promoter's residency requirement under the RBI guidelines must also be satisfied.
13. RBI Application & EAC Assessment
The application is addressed to the Chief General Manager, Department of Banking Regulation (or Department of Payments and Settlement Systems), screened for prima facie eligibility, and assessed by the External Advisory Committee (EAC) — which may seek information and hold discussions with the applicant. RBI's decision to grant the in-principle approval is final.
Ready to Apply for a Payments Bank License?
eFileSeva's experts will help you assess eligibility, structure the promoter capital, and complete your licensing journey quickly and compliantly.
Get Started TodayDocuments Required for a Payments Bank License
The required documents may vary depending on the applicant profile and route. eFileSeva helps you verify and prepare all the necessary documents for a smooth application.
Promoters & Corporate Documents
- Certificate of Incorporation, MOA & AOA (public limited company)
- KYC of promoters & directors (PAN, Aadhaar / passport, photographs)
- Net worth certificates and financial track record of the promoter group
- Board resolutions authorising the application & the shareholding plan
- Group structure, group companies & sources of capital
Business Plan & Financials
- Detailed business plan — deposits, remittances & distribution strategy
- Five-year projected financials (balance sheet, P&L, cash flow)
- Capital adequacy plan & funding roadmap (₹100 crore minimum)
- Branch network plan incl. 25% in unbanked rural areas
- Technology architecture & core banking system fitment
Risk, Technology & Governance Documents
- KYC/AML policy, risk management framework & internal audit plan
- IT & cyber-security policies (RBI IT/CS framework)
- Organisational chart & fit-and-proper declarations of directors
- Customer grievance mechanism & service-level commitments
- Any regulatory approvals / NOCs required for the applicant group
RBI Application & Post-Licence
- Application to RBI (CGM, DBR / DPSS) with the prescribed annexures
- EAC submissions, clarifications & due-diligence responses
- In-principle approval compliance report & final licence pack
- DICGC registration, PAN/TAN, and launch compliance setup
Pro Tip
Confirm the promoter group is fit and proper with a documented 5-year track record before drafting the application — RBI screens this first. Build the capital plan for ₹100 crore+ in a public limited company named "… Payments Bank Pvt/Ltd", and keep the promoter at 40% for five years while planning the phased dilution path to 26% in 12. Design the 75:25 investment framework and the CRAR 15% / leverage 3% model into the business plan — not after the in-principle approval. Lock down the technology and KYC architecture and the 25% rural branch commitment early, since the 18-month in-principle window must cover incorporation, capital, systems and branches together. And remember: RBI's 2026 cancellation of the Paytm Payments Bank licence shows that ongoing governance and audit discipline matter as much as obtaining the licence.
Timeline for a Payments Bank License
eFileSeva simplifies the licensing journey with expert guidance at every stage. While timelines may vary depending on the review cycle and promoter readiness, the following is a typical path.
Eligibility Assessment & Structuring
We verify the promoter's fit-and-proper status and track record, confirm the route, and structure the capital, shareholding and governance design against RBI's guidelines.
Application Dossier & Filing
We build the complete application — business plan, 5-year projections, capital and technology plans, policy documents and KYC files — and file it with the RBI's DBR/DPSS for screening and the EAC review.
In-Principle Approval (18 Months)
On clearance, RBI issues the in-principle approval valid for 18 months. We then complete the milestones — incorporation, ₹100 crore capital, core banking & KYC systems, and 25% rural branch network.
Final Licence & Launch Compliance
RBI issues the final licence under the Banking Regulation Act. We then set up CRR/CRAR monitoring, DICGC registration, KYC/AML operations and the return calendar for launch.
Estimated Licensing Time
A payments bank licence generally takes 24–36 months end-to-end — application preparation in 4–6 weeks, RBI screening and the EAC review in typically 6–12 months, and the 18-month in-principle window for setup before the final licence. Timelines may vary depending on application completeness and RBI's review cycle.
Process to Get a Payments Bank License in India
Licensing a payments bank involves more than just filing an application. From eligibility assessment and company incorporation to the EAC review, in-principle milestones and the final licence, eFileSeva provides complete support at every stage.
Eligibility Review & Route Selection
We review the promoter group's fit-and-proper status, track record and capital capacity, confirm that the payments bank (rather than an SFB, PPI or BC route) is right, and structure the shareholding and governance design against RBI's guidelines.
Company & Capital Structuring
We incorporate (or re-register) the public limited company with "Payments Bank" in its name, structure the ₹100 crore paid-up equity capital with the promoter at 40% for five years, and finalise the board and committee composition.
Application Dossier & RBI/EAC Review
We prepare the complete application — business plan, 5-year projections, capital plan, technology architecture, policies and KYC files — file it with the RBI, and support the screening and External Advisory Committee review, including clarifications and discussions.
In-Principle Milestones & Final Licence
Within the 18-month in-principle window we complete the launch conditions — capital confirmation, core banking and KYC/AML systems, the grievance cell, and the 25% rural branch network — and file the compliance report for the final licence under Section 22.
Launch & Ongoing Compliance
We set up CRR, CRAR and leverage monitoring, the 75:25 investment framework and liquidity management, DICGC deposit insurance, the KYC/AML operations, and the periodic return and audit calendar — plus RBI inspection readiness.
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Filings & Registrations Related to a Payments Bank
Depending on the applicant profile and the stage, you may need other filings alongside the licence application. eFileSeva helps you identify and complete the actions applicable to your promoter group.
| Filing / Registration | When It May Apply | Applicable Law / Authority |
|---|---|---|
RBI Licence Application & EAC ReviewApplication to DBR / DPSS |
The application for the payments bank licence is addressed to the RBI (CGM, DBR/DPSS) with the business plan, capital and technology details, screened for prima facie eligibility, and assessed by the External Advisory Committee before RBI's decision. | Reserve Bank of India Guidelines for Licensing of Payments Banks, 2014 |
In-Principle ApprovalConditional Approval (18 months) |
On clearance, RBI issues the in-principle approval, valid for 18 months, within which the bank must be incorporated, capitalised, and set up with systems and branches. RBI may impose additional conditions or withdraw the approval if adverse features emerge. | Reserve Bank of India Section 22, Banking Regulation Act, 1949 |
Incorporation as a Public Limited Company"… Payments Bank Limited" |
The entity must be a public limited company under the Companies Act, 2013 with "Payments Bank" in its name, incorporated (or converted) with the RBI approval of the name, and with the promoter at 40% for the first five years. | Registrar of Companies / RBI Companies Act, 2013 |
Final Banking LicenceSection 22 Licence |
Issued by RBI once the in-principle conditions are satisfied — the licence to carry on banking business as a payments bank. Operating without it attracts penalties, and RBI may also cancel the licence for continued non-compliance (as with the Paytm Payments Bank cancellation of April 2026). | Reserve Bank of India Sections 22(3) & 22(4), Banking Regulation Act, 1949 |
DICGC Registration & Statutory ReturnsDeposit Insurance & Prudential Returns |
Registration with the DICGC for deposit insurance, monthly/quarterly returns to RBI on deposits, CRR, CRAR, leverage and liquidity, the annual audited accounts, and the KYC/AML and Cyber-Security reporting. | DICGC / RBI RBI Act, 1934 & DICGC Act, 1961 |
PAN / TAN, GST & FEMA FilingsTax & Foreign Investment Reporting |
After incorporation, the bank obtains PAN, TAN and GST registration as applicable; where foreign investors are present, the FDI and FEMA conditions for private sector banks apply with the prescribed reporting, including shareholding and valuation compliances. | CBDT / CBIC / RBI Income-tax Act, 1961 & FEMA, 1999 |
Payments Bank vs Small Finance Bank: What's the Difference?
A Payments Bank and a Small Finance Bank are both differentiated banks, but they are built for very different models. Compare the key differences below to identify the correct licence for your business.
| Feature | Payments Bank | Small Finance Bank |
|---|---|---|
| 1. Primary Purpose | Payments, remittances and deposit acceptance — a narrow-purpose bank for financial inclusion. | Credit-led banking — lending to small businesses, micro and small industries, and the unserved segments. |
| 2. Lending | Cannot lend — no loans or advances of any kind. | Can lend, and must deploy 75% of Adjusted Net Bank Credit (ANBC) to priority-sector lending. |
| 3. Deposit Limit | Demand deposits capped at ₹2 lakh per customer. | No per-customer deposit cap. |
| 4. Credit Cards | Cannot issue credit cards; may issue debit/ATM cards only. | Can issue credit and debit cards. |
| 5. Minimum Capital | Minimum paid-up equity capital of ₹100 crore; promoter at least 40% for five years. | Minimum paid-up equity capital of ₹100 crore (₹200 crore where the promoter has other group entities); promoter at least 40%, phased to 26% in 12 years. |
| 6. Statutory Investments | Minimum 75% of demand-deposit balances in G-secs / T-bills (up to 1 year); maximum 25% in current and time deposits with other scheduled commercial banks. | Subject to standard CRR and SLR requirements like other scheduled banks. |
| 7. Prudential Norms | CRAR of at least 15% of risk-weighted assets; leverage ratio not less than 3%. | CRAR per the applicable Basel framework for banks, with the prescribed Tier-I and Tier-II composition. |
| 8. Suitability | Fintechs, telecoms, post offices and distribution-led promoters with large customer networks. | Microfinance institutions, NBFCs and lenders with a credit portfolio and priority-sector expertise. |
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Find answers to common questions about payments bank licensing and compliance with eFileSeva.
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