Payment Bank Impact On Digital Banking

“PAYMENTS BANK IMPACT ON DIGITAL WORLD IN BANKING”
Dissertation Submitted in Partial Fulfillment of the Requirements for The

Award of The Degree Of
MASTER OF COMMERCE
OF
BANGALORE UNIVERSITY
By
GANESHA M R
[REG NO: 17DKCOM019]
Under the guidance of
Prof.Aafaq Ahmed
(Professor)
POST-GRADUATE DEPARTMENT OF COMMERCE AND MANAGEMENT

SESHADRIPURAM FIRST GRADE COLLEGE, YELAHANKA, BANGALORE-
560064(Affiliated to Bangalore University and NAAC Accredited “A” Grade)
2018-2019
GUIDE CERTIFICATE
This is to certify that the dissertation entitled “PAYMENTS BANK
IMPACT ON DIGITAL WORLD IN BANKING” which has been
submitted in partial fulfillment for the award of M. Com degree by
GANESHA M R (reg.no.17DKCOM019) under the guidance of Prof.
Aafaq Ahmed session held. This dissertation report has not formed a basis
for the award of any other degree/diploma of any University or institution.
This has been submitted to any other University or Institution for the award
of any degree.
Place: Bangalore prof. Aafaq Ahmed
Date: (Guide)
DECLARATION
I GANESHA M R, student of Seshadripuram first grade college, hear by
declare that the project report entitled “PAYMENTS BANK IMAPCT ON
DIGITAL WORLD IN BANKING”submitted to the Bangalore university
in partial fulfillment of requirements of M.Com degree is a bona fide work
carried under the guidance of Prof. Aafaq Ahmad, professor, PG department
of Commerce and Management, Seshadripuram First Grade College,
Bangalore. This report has not been submitted to any institution or
University for the award of any degree.
Place: Bangalore GANESHA M R
Date: (Reg.No 17DKCOM019)

ACKNOWLEDGEMENT
I thank god for providing me all the resources and strength to complete my
dissertation.
I express my gratitude to Dr. S N Venkatesh, principal and Dr. Vijay
Kumar, Director, PG department of commerce and Management,
Seshadripuram First Grade College, Bangalore, for her encouragement and
support throughout the completion of this study.
I would like to thank prof. Aafaq Ahmed my project guide, and other
Professor of Seshadripuram First Grade College, PG department of
Commerce and Management, for their guidance, encouragement, support
and generous help to make this project work successful.
I would like to thank Bangalore University for giving me an opportunity to
undertaken a project work.
GANESHA M R
(17DKCOM019)
EXECUTIVE SUMMARY
TITLE: “PAYMENTS BANK IMPACT ON DIGITAL WORLD IN
BANKING”
The payments banks are affecting the banking sector both negative and positive vibration
in Indian banking sector. The positive vibration like UPI payments, scan and pay services,
utility bills payment etc. on the same way the negative vibration is the main thing is there
is no awareness about payments bank and the main problem is network error to peoples in
the society. The study of aim this project in this digital world how payments bank
affecting in banking both negative and positive response.
The study of aim this project and the respondents are dividing into two types of methods.
One method is collected data from payments bank customers and another method is
banking employees from different bank. In this survey the customers are 51 are
responders and 11 respondents from banking employees.
KEY WORDS: UPI payments, payments banks applications through mobile.

LIST OF CONTENTS
CHAPTER CHAPTER NAME PAGE

NO. NUMBER
I. Introduction 1-16
II. Review of Literature and Research 17-22

Design
III. Evolution of Postal Banks 23-27
IV. Data Analysis and Interpretation 28-60
V. Summary of Findings, Suggestions 62-63

& Recommendation
Bibliography 64-64
Annexure 65-68
LIST OF TABLES
TABLE NO. TITLE PAGE NO.
4.1 Age of respondents 28
4.2 Gender of respondents 30
4.3 Income level 31
4.4 Customers having account in bank 32
4.5 Frequent users of payments bank 34
4.6 Frequent users of internet banking 35
4.7 Types of payments bank used by customers 36
4.8 Problems faced by payments bank 38
4.9 Customers suffered from online fraud 39
4.10 Customers experience about payments bank 40
4.11 Name of the banks 42
4.12 payments bank utilizing by bank employees 44
4.13 Banking services to customers more than payments 46

banks
4.14 Bank rates affect from payments banks 48
4.15 Bank saving deposit affect from payments banks 50
4.16 Online transaction in banks through percentage 52
4.17 Types of online banking used by bank 54
4.18 Text message updates from bank 55
4.19 Email updates from bank 56

4.20 Payments banks competing with banks 58
4.21 Payments bank great potential in future 60

“PAYMENTS BANKS IMPACT ON DIGITAL WORLD IN
BANKING”
CHAPTER-1
1.1 INRODUCTION:
Since 18th century banks were providing loans to the needy people and making deposit from
people. Bank is a service oriented; the first bank was bank of Hindustan it was established in
the year 1770 and liquidated on 1829-1832. The general bank of India was established on
1786 but it was unsuccessful in achieving once goal in the year 1791.
From the 18th century to present era state bank of India (SBI). Imperial bank of India was
established by merging three banks that was bank of Calcutta which was established in 1806
later it was renamed bank of Calcutta. And the second bank was bank of Bombay it was
established in the year 1840. The third bank was bank of madras it was established in the
year 1843 these three banks was merged in the year 1921 and it was called as imperial bank
of India. At the time of independence state bank India established in the year 1955 the
presidency bank are the three banks that is bank of Calcutta, bank of Bombay and bank of
madras from many years this three banks (presidency bank) it was called quasi-central
banks. This presidency bank was beneficiary until reserve bank of India comes existence.
Reserve bank of India was an established in the year 1934.
Stare bank of India had authority of eight states in 1959 this was called associated banks. In
the Indian economy majorly economic growth by nationalized banks. Government took
initiative to make nationalized bank in 1969 the Indian government nationalized there was
majorly 14 banks among them vast bank was bank of India later private banks were
nationalized six private bank were nationalized.
Banking sector are large size and widespread networks. Banking sector were classified by
two sectors that is schedule bank and non-schedule bank. Schedule banks are those included
under the second schedule of the reserve bank of India act 1934.
PG Department of Commerce and Management SFGC, Yelahanka 1

BANKING”
Non-schedule bank are the banks which are not undertaken or registration under schedule of
reserve bank of India (RBI) act 1934.
These traditional banks were converted into modernized bank, as when IT (information
technology) era was spread to world it was necessary for bank to implement new technology.
The computer users were more after the economic liberalization in 1991 so, the banking
sector was utilizing computers for transaction. the banking sector was spread globally and
banking sector was struggling to control customer services by international transaction and it
was difficult to save customer information it was mess to survey without technology so they
came up with online system like payment banks.
In 1994, the committee on technology issues relating to payment systems, cheque cleaning
and securities settlement in the banking industry. It emphasized electronic fund transfer
(EFT) system, with the BANK NET communications network as its carrier. It also said that
MICR cleaning should be set up in all branches of all those banks with more than 100
branches. The central bank of India develops applications for digital currencies.
1.2 PAYMENSTS BANKS IN INDIA
Definition of payments banks:
A payment bank is a differentiated bank that will undertake only certain restricted banking
functions that the banking regulation act of 1949 allows. These activities include acceptance
of deposits, payments and remittance services, internet banking, and function as business
correspondent of others banks. A payment bank is a different from bank that will undertake
only certain rules and regulation.

BANKING”
1.3 BACKROUND TO PAYMENTS BANKS IN INDIA

2. The term payments banks are new and seems to have been invented in Indian
context. In September 2013, a committee of comprehensive financial services for
small business and low-income households headed by Nachiketmor, was formed by
the RBI.
By January 2014, the Nachiketmor committee submitted its final report and one of its
recommendations was the formation of a new category of bank called payments
banks.
3. The above was followed by announcement in union budget 2014-2015 (presented on
July 10, 2014) where in it was decided that after making suitable changes to current
framework, a structure will be put in place for continuous authorization of universal
banks in the private sector in the current financial year. RBI creates a framework for
licensing small banks and other differentiated banks.
4. Taking cues from the budget RBI issued the drafts guidelines in July 2014 itself on
payments banks and small banks as differentiated and restricted banks. Based on the
feedback RBI came out with final guidelines for payments banks in November 2014
and called application from entities which are interested to start such banks.
PAYMENTS BANKS
1. The payments banks are new concept derived from reserve bank of India (RBI). In
payments banks public can create savings account and current account but in
payments banks loans and advances and credit cards will not be issued.
2. A payments banks providing services like payment of bills, transfer of money from
one account to another account and the payments banks providing other type of
services like traditional bank. Traditional bank which provides ATM card, third party
fund transfer, debit card and net banking.
3. A payment banks it works as traditional bank but payments banks cannot issue credit
card and loans and advances. In payments banks mainly useful for small-scale

BANKING”
industry or for small business and low-income peoples to transfer and accept their
money. In deposit and transfer process its maximum limit is rupees 100000.
4. Payments banks and traditional banks provides common services to their customer
but main difference between payment bank and traditional bank is traditional bank
transaction deal manual and online system through but it done through website.
Payment banks deals with only online system.
5. Payments banks are the banks mainly deals with transaction through mobile wallets
and payments banks attracting their customers through mobile apps and online
transaction its different from traditional banks in this type of method of banking
system the reserve bank of India will not provide to all banks or not everyone who
start payments banks and who cannot ask for license. To give license certain rules
and regulation should full fill to open payments banks from bank minimum capital
100 crores possible to open a payments banks and 500 crores for commercial bank.

BANKING”
1.4 LIST OF PAYMENTS BANKS
1.4.1 AIRTEL PAYMENT BANK:
The airtel payment bank is the first bank in india to recevie a payments banks licence from
reserve bank of india (RBI). The reserve bank of india issued licence under section 22(1) of
banking regulation act 1949. The joint venture between bharati airtel limited and kotak
mahindra bank. Kotak mahindra bank holds 19.90 stake in the airtel payments banks.

“PAYMENTS BANKS IMPACT ON DIGITAL WORLD IN BANKING”
BACKROUND:
Bharathi airtel is largest network oprator in india and third largest network in the world in terms of
subscribers. Airtel payments banks reported deposits of rupees 68.33 crores at the end of the finanacial year
ended 31 march 2017 which it was first year opration.
Before airtel payments banks its working under the name of airtel M- commerce service limited. The airtel
payments banks and bharthi axa life started to government insurance plan pradan mantri jeevan jyothi bima
yojana(PMJJBY).
SERVICES PROVIDED BY AIRTEL PAYMENTS BANK:
 BHIM UPI
 Pay bills
 Send money
 Accept money
 Scan and pay
 Insurance
 Home loans
1.4.2 ADITYA BIRLA PAYMENTS BANK:

Aditya birla payments banks is a bank started as joint venture by aditya nuvo limited and idea cellular
launched on Feburary 22, 2018. The aditya birla payments banks is fourth payments banks in india. Reserve
bank of india issued licenced under setion 22(1) of banking regulation act 1949. In the joint venture aditya
birla nuvo limited and idea cellular shares percentage is 51:49.
BACKROUND :
Aditya birla payments banks before operted was idea mobile commerce services limited (IMCSL) as a brand
of idea cellular limited.
SERVICES PROVIDED BY ADITYA BIRLA PAYMENTS BANK:
 Banking
 Payment and payment systems
 UPI, NEFT, IMPS
 Third party loan refferal
 Digital wallets
 Group insurance
1.4.3INDIA POST PAYMENTS BANKS:
India post payments banks is government of india undertaking payments bank. Controlling under the
department of posts, ministary of communications. On 19 august 2015 india post got licence from reserve
bank of india to run a payments bank in india and it was rigisterd as a public limited government for
setting up a payments bank on 17 august 2016.
India post payments bank not like all other payments bank it will oprate at a smaller scale without
involving credits like without issue advances loans and issue credit cards.
SERVICES PROVIDED BY INDIA POST PAYMENTS BANKS:
 Saving account
 QR code payments
 Unified payments interface
 Immidiate payments services
 National electranic fund transfer
 Real time gross settlement
 Bharat bill pay
 Direct benefit transfer
1.4.4 JIO PAYMENTS BANK:
Jio payments bank got licence to run a payments bank in india. Under the section 22(1) of banking regulation
Act 1949. On april 3, 2018 jio payments bank became six largest payments bank in india.
The jio payments bank limited joint venture between the reliance industries and the state bank of india with
the stake of 70:30.

1.4.5 PAYTM PAYMENTS BANK :
The paytm is an indian e-commerce payments system and digital wallets company based out of NOIDA
SEZ, india. In august 2015 paytm payments bank got a licence from reserve bank of india. The paytm
payments bank is a separate entity in which founder vijay shekhar sharma will hold 51% share, one97
communications holds 39% and 10% will be held by a subsidiary of one97 communications and sharma.
SERVICES PROVIDED BY PAYTM PAYMENTS BANK:
 Saving account
 Online shopping
 Payment systems
 Digital wallets

1.4.6 VODAFONE M-PESA LIMITED:
Vodafone has recevied payments bank licence from reserve bank of india. Under the section 22(1) of
banking regulations act 1949. Vodafone has issued an open mandate to bankers to find best partner for its
payments bank as the foreign holding in payments bank cannot be more than 74%.
SERVICES PROVIDED BY VODAFONE M-PESA LIMITED
 Send money
 Withdraw money
 Pre-paid recharges
 DTH recharges
 Bill payment

1.4.7 TECH MAHINDRA LIMITED:
Tech mahindra has received RBI nod to set up payments bank. The bank will be an independent unit under
the mahindra group led by tech mahindra (IT firm) and mahindra finance (rural non banking financial
company) as equal contributions.
SERVICES PROVIDED BY TECH MAHINDRA LIMITED :
 DTH recharges
 Utilities bill payments
 Online payments for product and services
1.4.8 FINO PAYTECH LIMITED:
ICICI bank and fino payments bank attempted to open payments bank. The FINO paytech limited has
recevied in principle licence from reserve bank of india to start payments bank in india. The ICICI group has
about 16% stake in FINO and is the largest domestic shareholder. FINO which was originally formed as a

domestic remittances and payments company. Under the guidance of ICICI bank later became an
independent equity expertising in domestic remittances and digital payments.
SERVICES PROVIDED BY FINO PAYMENTS BANK:

 Money transfer
 Insurance
 Prepaid recharges
 Utility bill payments
1.4.9CHOLAMANDALAM DISTRIBUTION SERVICES LIMITED:
Cholamandalam investment and finance company has decided to set up a payments bank considering
compition and other factors including long gestation period to become profitable.

1.4.10SHRI DILIP SHANTILAL SHANGHVI:
Shri dilip shantilal shanghvi got principle approval from reserve bank of india to start payments bank in his
personal capacity had announced a tie-up with telenor financial services and IDFC bank limited to pursue the
venture. Dilip shanghvi holds 41% stake in the partnership with telenor holds 39% and IDFC bank the rest
20%.
1.4.11NATIONAL SECURITIES DEPOSITARY LIMITED(NSDL):
Reserve bank of india has granted principle indication to national securities depositary limited for payments
bank. IDBI bank approched the national securities depositary limited to buy stake in the payments bank.
IDBI bank is one of the pramoters of NSDL and holds 30% in the largest depositary.

1.5 OBJECTIVES OF PAYMENTS BANK:
 The objectives of setting up of payments bank will be to further financial inclusion by providing
small savings accounts
 Payments/ remittance services to low income households, small businesses, other unrecognized sector
entities and other users
1.6 SCOPE OF PAYMENTS BANK:
 Acceptance of deposits in payments bank will intially be restricted to holding a maximum balance of
Rs 1,00,000 per individual customer.
 Issue of ATM/debit cards. However payments bank cannot issue credit cards.
 Banking correspondents of another bank, subject to reserve bank guidelines on banking
correspondents.
 Distribution of non-risk sharing simple financial products like mutual fund units and insurance
products etc.
 Payments and remittances through various channels.
1.7 ADVANTAGES OF PAYMENTS BANK:
 Individuals can use the paymnts bank account to make daily or monthly cash transactions, either
through debit card or through mobile.
 This can aslo help guard againest debit card fraud, since you can keep smaller balance in these
accounts.
 Since there is no restriction on the income levels of those who wish to open accounts in payments
bank those who have salary accounts in regular bank accounts can also open an account in payments
bank.
 Payments bank may also offer a higher rate of interest on savings bank accounts in order to attract
customers.

 However the real attraction for customers will not be the interest on deposits but the convenience of
carrying out banking transactions at their doorstep.
 Student living away from home would also be use facilities of payments banks to pay their bills.
 In commercial bank for KYC ( know your customer) they charges fees and have strict in KYC norms.
But in payments bank KYC norms may be simplified and charges may be lower. Payments bank will
target the non-banking population so they might have forgiving KYC norms.
 The payments bank will be more technology intensive, their fees would be lower than regular banks.
 If a person have not manually open an account in bank they have oppurtunity to open account in
payments bank so, there is no nessasity to open manually account in bank.
1.8 DISADVANTAGES OF PAYMENTS BANK:
 Payments bank cannot lend money so, to make money and be profitable, they have to charge its
coustmer for the transaction that are executed through them.
 RBI has not said how many licences it will issue in each category ( payments bank and small
banks)
 The basic principle for a succesful payments bank will be: high quality, low cost of delivery,
encourage its customers to do cashless transaction and technological framework. Essentially the
cost of transactions for payments bank needs to be lower than traditional branch based on banking
model But cost is the same.
1.9 SWOC ANALYSIS OF PAYMENTS BANK:
STRENGTHS
 Innovative business model

 Nationwide and last mile coverage
 Large existing customer base
 Anywhere anytime banking
 Lower servicing and customer acquisition cost
 Financial inclusion

WEAKNESS
 Loss of business due to poor network / internet

 Lack of awareness among people on latest technology and products / services
 Low margin business
 Limited products offering
 Security concerns
OPPURTUNITIES
 Massive potential for market expansion in rural areas

 Greater innovation will help to produce and offer unique products and services
 Techonology to help offer right product to right customer at a right time
CHALLENGES
 Intense competition to lower profits

 Cash dominated economy
 Technology inexperience and litearcy constraints will lead to lower acceptance of technology
 Lack of awareness
 Low customer loyalty
 Regulatory restrictions

CHAPTER-2
2.1 INTRODUCTION
In this chapter the study analysis that the various authors view point of the payment banks. There are two
context which are below that is one Indian context and another western context.
2.2 REVIEW OF LITRATURE:
INDIAN CONTEXT
 Dr. Reena Agarwal (2016): The introduction of Payment Banks in India is a major positive
disruption to the banking sector and would certainly see the cost associated with the transfer of
money or settlements reduce dramatically for end users. Payments banks are expected to
revolutionize financial services the way e-commerce has changed the retail industry; by offering
prompt service, reasonable prices, a new approach, infinite options for customer, emphasis on
volumes transacted over margins earned, especially by altering the established standards. The success
of these challenges to make a place for themselves in the industry that has being ruled by
conventional banks for decades and boost healthy competition will depend on the way they approach
the market and the financial products they offer. The market forces are waiting to challenge the
established banks existing for long and may shift the balance of power in favor of these challenges‟
banks for specific banking services. Payments banks will be more approachable and dexterous, and
can promptly respond to changes in the economy. With few / no inherited limitations and greater
receptiveness and approachability to customer needs they will attract a large pool of un-served,
under-served and well-served customers. Though attracting customer might be easy but it would be
necessary to monetize these relationships.
While the incumbent banks are constrained by their outdated business model, payments banks are
expected to introduce fresh „hi-tech and hi-touch‟ digital approach in improving as well as deepening
their reach. The ever-growing customers‟ expectations for faster-easier-simpler banking facilities will

drive the bankers to work creatively and passionately, and contribute to the growth of different
sections of the society and economy at large.
 Ramesh Naik (2018): Payment banks have been introduced with the primary objective of
increasing the impact of financial inclusion drive. The payment banks play a significance role in
implementing government‟s direct benefit, transfer schemes, where subsidies on health care,
education and gas are paid directly to beneficiaries account. However, the competition between
traditional and payment banks will lead to widening and improvement in quality of banking services
are reduced costs and which may finally lead results in financial inclusion. There are numerous
bottlenecks that need to be addressed before the real benefits of payment banks. There are millions of
Indians don‟t have access to banking facilities. They cannot avail of government benefits, loans,
insurance and even interest on savings. M-Banking, IPPB, PMJDY will reach the unbanked and the
under banked across the all cross section of society and geographic.
 Vaishnavi (2015): Payment banks are becoming the most popular medium of digital transactions.
India is going towards a cashless economy, which is more feasible and adaptable in relation to the
recent technological and economic trends. In this study, the most preferred payment bank is Paytm
since it's easily accessible and creation of account is instantaneous. Payment banks are providing a
gateway to the low income and middle-income groups. Innovation and improvisation of the business
could be the key elements of success of Payment banks. On comparison, it's too early to judge the
competency of Payment banks with respect to, well established banks. Lastly, the negative aspects of
payment banks will come to an end along with time, as nothing remains constant in a dynamic
economy.
 Chanderprabha (2017): At the base of conclusion, the study state that undoubtedly payment
banks will pave a smooth way for less cashless economy and encourage the financial inclusion too by
appending the unbanked and under banked person to the banked media. And certainly, payment
banks will take strides in all walks of life. The payment bank initiative has certainly put the banking
system on a rethink mode. But for a successful journey of payment banks a number of hurdles are
need to be crossed with velour and enthusiasm.
 Seema Joseph (2017): With the entry of payment banks, the process of shifting money from
bank accounts to wallets will become truly seamless, and thus it is extremely possible that many
customers may open payment bank accounts in addition to their regular bank accounts. They may
segregate small-ticket payments from other bank payments by holding separate accounts. This is a
key value proposition and would be really a game change in Indian Banking System. But as it is a
new instill in India, many people are still not aware about Payment Banks, its services, benefits and
security norms. Hence, the holders of Payment Banks have to create awareness among people.
 Dr. SonalPurohit: Payments banks can prove to be a milestone which will help a lot to achieve
the financial inclusion objective. Payment Banks will bridge the gap between bank branches and rural
area, the model suggests that mobile phones will be used to bank with people in remote areas and
transactions will be digital. By this route Payment Banks will able to touch a large number of
populations in the rural area. The zero balance low-income groups will allow these people to open a
bank account and help them participate in the financial transactions. Payment Banks will also play
the significant role in the government's direct benefit transfer scheme in which the subsidies and other
benefits can be transferred directly to the People on Bottom of the pyramid. In Payment Banks, there
is a compulsory feature that the investment of deposits should be in Government bonds and securities
which are very positive for the developing economy of India. Thus, we can say that payment banks
will prove to be a milestone for covering the unbanked population and improve financial inclusion.
 Shalini Mittal:The paper investigated the reasons that can affect the usage of payment banks by
the customers in Delhi NCR. It suggests that convenience or ease in use of technology has a positive
impact on the use of payment banks, but other factors like gender, qualification and occupation also
impact the customer to avail the services of a payment bank. It is further observed that, a bank can
retain a customer with many products and services, but he/she can also be using the services of other
banks too as the need of the customer from different banks can be entirely different. The customer
typically uses payment banks for services such as mobile recharge and payment of bills, while they
still prefer universal banks for savings. The mind-set of the customers can be changed with proper
promotion and awareness by the payment banks. Since RBI has put many restrictions on payment
banks with regards to their operations, they can be made more competitive by easing some
restrictions.
 Anahita Singh:While financial inclusion has been a need of the hour for more than 3 decades,
with efforts being taken from the nationalization of banks, as of the present, it is necessary to ensure
additional measures are taken to raise awareness amongst the masses that may not have access to all

the information required to be considered financially literate. Along with the introduction of
technological measures for providing banking services such as payment banks, it is also necessary to
ensure the challenges faced can be overcame in order to reap full benefits of this unique concept.
Payment banks can certainly be seen as the future, despite facing difficulties in establishment and
operations as the government as well believes that it is possible that these payment banks will be able
to cover up their losses within two years, while introducing other services slowly, which may also
help support the unique model of these banks. Thus, keeping in mind the objectives and motive of the
creation of these banks, it can be concluded that they will be able to lift India‟s vulnerable and aid in
economic development of all by provision of their services and extended reach
WESTERN CONTEXT
 Rangsan.Nochai: The author suggests that Nowadays, the competition between the competitors
of Internet Banking is intense. Therefore, each of banks should provide the best elements to
customers. As a consequence of High competition in this area, all of the banks try to develop their
services and internet banking system, as much as Possible, to match customer satisfaction. Banks
should make Effective decision in service development and marketing Strategies for staying
competitive advantage in this industry.
 Alagh Jacinta Itch:The author suggest that this study reveals that the introduction of electronic
banking in Nigeria has a strong influence on the development of the payment system in particular and
the banking system in general. However, the introduction of the system, involves commitment of
huge amount of financial resources on computer technology and telecommunication facilities,
computer technology is a primary requirement for the proper functioning of electronic banking. The
major problems hindering the effective operation of cashless banking in Nigeria are infrastructural
deficiencies such as erratic power supply, lack of government support and high charge on payment
terminals. These problems are only peculiar to Nigeria as it is known that in developed countries
issues like power failure or failure links are not in existence. However, the introduction of electronic
Banking System has also contributed significantly to bank income by way of fee or changes gotten
from these services.

2.3 RESEARCH GAP
As per the review of literature I came to know that there are various authors saying about impact payment
banking but no one as talked about to make the disadvantage of the payment banks so, I would like to know
all disadvantage of the payment banks and convert that to advantage.
2.4 STATEMENT OF PROBLEMS
The study analysis what are the impact for commercial bank when the payment bank come? To know why
payment banks are attracting customer why they uses payment banks.
2.5 SCOPE OF STUDY
I have the knowledge about payment banking and commercial banking but not having knowledge about
payment banks have pressure to commercial banks so to study all the impact of payment bank to commercial
bank.
2.6 OBJECTIVES OF THE STUDY
 To analyze the effect on commercial bank

 To analyses where the payment banks are lacking behind.
 To analyze satisfaction of customers
2.7 SOURCES OF DATA
PRIMARY DATA: 51 respondents of are payments bank users and 11 respondents are bank employees from
different banks.
SECONDARY DATA: Books, Journals, Magazines, Websites and so on

2.8 LIMITATIONS OF THE STUDY
 I have put effort to collect the data from commercial bank

 It was difficult to collect the data from customer about payment banks
 It was difficult to collect data from the employees of payment banks.
2.9 METHODOLOGY OF THE STUDY
The data is collected from primary source data and secondary sources of data. The area of my study is in
Yelahanka I will be collecting all data from commercial bank, payment bank and customers.

CHAPTER -3
3.1 INTRODUCTION
The payments bank Is a new and seems to have been invented in Indian context. In September 2013, a
committee on comprehensive financial services for small businesses and low-income households headed by
Nachiketmor, was formed by the RBI. January 2014, the Nachiketmor committee submitted its final report
and one of its recommendations was the formation of a new category of bank called payments banks.
The above was followed by announcement in union budget 2014-2015(presented on July 10,2014) where it
was decided that after making suitable charges to current framework, a structure will be put in place of
continuous authorization of universal banks in the private sector. RBI will create framework for licencing
small banks other differentiated banks. differentiated banks serving minimum interest, local area banks,
payments banks etc are contemplated to meet credit and remittance needs of small businesses, unrecognized
sector, low income households‟ farmers and migrant work force.
In the budget, RBI issued the draft guidelines in July 2014 itself on Payments banks and small banks
differentiated or restricted banks. Based on the feedback RBI came out with final guidelines for payments
banks in November 2014, and called the applications from entities which are interested to start such banks.
It‟s a step to redefine banking in India. The Reserve Bank expects payment banks to target India‟s migrant
labourers, low-income households and small businesses, offering savings accounts and remittance services
with a low transaction cost. Payments banks are therefore expected to create some disruption in the banking
system and bring banking to the masses on a wider scale.
 It hopes payments banks will enable poorer citizens who transact only in cash to take their first step
into formal banking. So, for unbanked customers, a payments bank account will provide the much-
needed access to banking services.
 It could be uneconomical for traditional banks to open branches in every village but the mobile
phones coverage is a promising low-cost platform for quickly taking basic banking services to every
rural citizen. A labourer working in a metro, today spends about half a day in a queue at the local bank

branch to transfer money to his family in the village. With a payments bank account, he may be able to
do it through his phone which need not even be a smart phone.
 The innovation is also expected to accelerate India‟s journey into a cashless economy. The new
payment banks will also make people less dependent on cash, even for small sums, and since a mobile
wallet could be a bank account soon, this move could, over time, have a big impact on m-commerce.
 For customers who already have bank accounts, a payments bank account canbe an additional one
from which they can carry out all their remittance and transactions electronically. They can avoid
handling cash.
 They will be governed by the provisions of the Banking Regulation Act, 1949, Reserve Bank of India
Act, 1934, Foreign Exchange Management Act, 1999; Payment and Settlement Systems Act, 2007.
Deposit Insurance and Credit Guarantee Corporation Act, 1961. and other relevant Statutes and
directives. The guidelines will be reviewed by the RBI regularly. RBI‟s main aim to push for payments
bank is to serve the need of different banking activities in the rural areas. This has both micro and
macroeconomic benefits and serves the general public at large.
3.2 HISTORY OF PAYMENTS BANK
On September 2013, committee on comprehensive financial services for small businesses and low-income
households headed by Nachiket mor was formed by RBI. On 7 January 2014, the Nachiket mor committee
submitted its final report among the various recommendations, it recommended the formation of a new
category bank called payments bank. On 17 July 2014, the RBI released the draft guidelines for payments
banks, seeking comments for interested entities and the general public. On 27 November, RBI released the
final guidelines for payments banks.
In February 2015, RBI released the list of payments bank which had applied for payments bank licence.
There were 41 applicants it was also announced that an external advisory committee (EAC) headed by
Nachiketmor would evaluate the licence applications 28 February 2015, during the presentation of the budget
it was announced that India post will use its large network to run payments bank. The external advisory
committee headed by Nachiketmor submitted its findings on 6 July 2015. The applicant‟s entities were
examined foe their financial track record and governess issues. On 19 august 2015, the reserve bank of India
gave in-principle licences to 11 entities to launch payments banks. the in-principle licence was valid for 18
months within which the entities must fulfil the requirements and they were not allowed to engage in
banking activities within the period. The RBI will grant full licences under section 22(1) of the banking
regulations act 1949, after its satisfied that the conditions have been fulfilled.
The minimum capital requirements are 100 crores. For the first years, the stake of the promoter should
remain at least 40%. Foreign shareholding will be allowed in these as per the rules for foreign direct
investment (FDI) in private banks in India. The voting rights to be regulated by the banking regulations act
1949, the voting rights of any shareholder is capped at 10%, which can be raised to 26% by reserve bank of
India. Any acquisition of more than 5% will require to approval of the RBI. The majority of the bank‟s board
of director should consist of independent directors appointed according to RBI guidelines.
The bank should be fully networked from the beginning. The bank can accept utility bills. It cannot form
subsidiaries to undertake non-banking activities. Initially the deposits will be capped at 100,000 per
customer, but it may be raised by the RBI based on the performance of the bank. Payments banks are not be
permitted to lend to any person including their directors. 25% of its branches must be in the unbanked rural
area. The bank must use the term “payments bank” in its name to differentiate it from other types of banks.
The banks will be licenced as payments banks under section 22(1) of the banking regulation act 1949, and
will be registered as public limited company under the companies act 2013.

3.3 Process of payment banks
Figure 3.1
Work of payment banks:
Electronic payments to accounts at the same bank happen straightaway. Those to accounts at other banks
take longer and depend on when the payment was set up, the payment type, and when the bank processes the
payment. Payments between banks consist of the following steps:
 A customer instructs his or her bank (the sending bank) to make a payment.
 The sending bank checks the customer has enough money in the account for the payment.
 The sending bank prepares an electronic file, along with other transactions, for the bank whose customer is
receiving the payment. This collection of individual transactions is called a "batch".
 The sending bank forwards the batch to the Reserve Bank, which transfers the value of the batch between the
sending and receiving banks‟ accounts at the Reserve Bank. This is called "settlement".

 Once settlement is complete, the Reserve Bank forwards the batch to the receiving bank. This is called
"interchange".
 The receiving bank credits the payment to its customer‟s account.
3.4 Mission of payment banks:
To ensure payment and settlement systems in the country are safe, efficient, interoperable, authorised,
accessible, inclusive and compliant with international standards.
3.5 Vision of payment banks:
To proactively encourage electronic payment systems for ushering in a less-cash society in India.

CHPATER-4
4.1 INTRODUCTION:
The payments bank impact in digital world on banking as per the survey the customers of payments bank
users and employees of bank given information about this survey in these 51 respondents are customers and
11 members are bank employees from different banks and this survey done through a descript analysis and
the survey collected through google forms.
4.2 COUSTMERS RESPONSE:
Table 4.2.1 Age of The Respondent
Age No of respondents
0-20 3
21-50 48
51-80 0
81-100 0
Total 51
Source: Primary Data
Analysis:
From the above table the age of the residents is more than 20 years respondents are more because they all are
youngsters so they are educated so they know how to use online transaction through mobile apps so here
they are more respondents.

AGE OF THE RESPONDENT

60
50 48
40
30
20
10
3
0 0
0
0-20 21-50 51-80 81-100
Figure 4.2.1
Interpretation:
From the above figures the age of respondent the total respondents is 51 under that 0-20 is the 3 respondents
are using the payments bank and from the age of 21-50 here 48 respondent are using this payments bank
because in this age respondents are youngsters so they know how to use the online transactions, in the age of
51-80 and 81-100 under this age of respondents are not using any online transaction because they don‟t know
how to use.

Table 4.2.2: Gender of Respondent
Gender No. of respondents
Male 34
Female 17
Others 0
Total 51
Analysis:
From the above table the gender in using of payments bank here totally 51 respondents are there in that
compare to female respondent‟s male respondents is more because they are doing more small-scale business
so they want more use from this payments bank.
GENDER
40
34
35
30
25
20
17
15
10
0
MALE FEMALE
Figure 4.2.2

Interpretation:
From the above figure in the 51 total respondents the male respondents are 34 and female respondents are 17.
Table 4.2.3: Income
Income No. of respondents
Below 2,00,000 36
2,00,000-5,00,000 12
5,00,000-8,00,000 2
Above 8,00,000 1
Total 51
Analysis:
From the above table we easily know about respondent‟s income level in this case below 200000 more
respondents is there so that respondent‟s apart from banking transaction they will use digital wallets and
payments bank option in their routine work life.

INCOME
40
36
35
30
25
20
15 12
10
5 2 1
0
below-₹200000 ₹200000-₹500000 ₹500000-₹800000 above ₹800000
Figure 4.2.3
Interpretation:
From the above figure the income level of 51 respondents under this below 200000 is 36 respondents,
200000- 500000 is 12 respondents, 500000-800000 is 2 respondents and above 800000 is 1 person is using
the bank account for their savings and in this statement below 200000 is 36 respondents is there so they can
easily run their activity through payments bank also.
Table 4.2.4 Customers Having Account in Bank
Respondent having account No. of respondent
Yes 51
No 0
Total 51
Source: primary Data

Analysis:
The study analysis that all the respondent has account in the bank. This means that all have intention to save
their income and increase their income and to take the facility by the banks.
COUSTMERS HAVING ACCOUNT IN BANK

60
51
50
40
30
20
10
0
0
YES NO
Figure:4.2.4
Interpretation:
From the above table about having account in bank under 51 respondents are having account in bank and one
reason also is three under the government of India scheme pradanamantri Jan Dan yojana all are opened
account in bank.

Table 4.2.5 Frequent Users of Payments Bank
Respondent using payment banks No. of respondent
Yes 45
No 6
Total 51
Sources: Primary Data
Analysis:
The study analysis that most of the respondent are frequent user of the payment banks. Most respondent do
the transaction in payment banks because it is easy to do transaction and there will not be any delay. In this
modern ear this digital transaction is popularly running. Few respondents are not involved payment banks
because they are not having any knowledge of the payment banks, they are afraid of stolen personal details
or miss use of the fund.
FREQENT USERS OF PAYMENTS BANK

50
45
45
40
35
30
25
20
15
10 6
5
0
YES NO
Figure 4.2.5

Interpretation:
From the above table the frequent users of payments bank under 51 total respondents 45 respondents are
saying YES and rest of the 6 respondents are saying NO so here a greater number of respondents are using
payments bank.
Table 4.2.6 Frequent Users of Internet Banking
Respondent user of internet banking No. of respondent
Yes 41
No 10
Total 51
Sources: primary data
Analysis:
In this table the study can analysis that few respondents use internet banking because they have opportunity
to work in their account in particular web only their account transaction can be done.

FREQUENT USERS OF INTERNET BANKING

45 41
40
35
30
25
20
15
10
10
5
0
YES NO
Figure 4.2.6
Interpretation:
From the above table the total respondents are 51 under 51 respondents 41 respondents are saying YES and
10 members are saying NO. The internet banking only using in banking websites online banking and internet
banking is different.
TABLE 4.2.7 TYPES OF PAYMENTS BANK USED BY COUSTMERS
Respondent Using Type of Payment No. of respondent
Paytm payment bank 36
Airtel payment bank 1
Jio payment bank 3
All the above 11
Total 51
Source: primary data

Analysis:
The study analysis that respondent use paytm that are the most mood used by the youths that college students
are the most user of the paytm because there is no need of having had cash in pocket if they have amount in
account, they can transfer the amount to the whom they want. In this digital world even, small shopkeeper
has paytm. Respondent has awareness of the paytm only other payment account they don‟t have any
awareness.
TYPES OF PAYEMENTS BANK USED BY

COUSTMERS
36
40
30
20
10 1 11
3
0
Paytm
Airtel
payments
payments Jio payments All the above
bank bank
bank
Figure 4.2.7
Interpretation:
From the above table the total number of respondent‟s is 51. Under these 51 respondents everyone using
different types of payments bank like 36 respondents are using paytm payments bank, 1 respondent using
airtel payments bank, 3 respondents are using jio payments bank and rest of 11 members using all the above.
From this table we want to know which one is better for respondents that one they are using regularly.

Table 4.2.8 Problem Faced by Payments Bank
Respondent facing problem No. of respondent
Network problem 37
Lack of knowledge to use 3
Fra dental activity 5
No customer complete desk 6
Total 51
Analysis:
The study analysis that the problem faced by the customer while using payment banks. Most of the
respondent says that the problem is network problem they don‟t get proper network in rural area to
transaction in payment banks. Few respondents say that they are not able to work with payment bank
because they don‟t have knowledge to work in payment banks. Five respondents responded that from doing
the payment in payment bank there may be stolen of the data.
PROBLEMS FACED BY PAYMENTS BANK

40 37
35
30
25
20
15
10
5 6
5 3
0
Network problem Lakh of knowledge Fraudulent activities No customer
complaint desk

Figure 4.2.8
Interpretation:
From the above table what are the problems facing by payments bank in this survey the 51 respondents are
given the information. Under this 51 respondents 37 respondents are saying when using payments bank
network problem is more, 3 respondents are saying we don‟t know how to use payments bank, 5 respondents
are saying fraudulent activities is there and rest of the 6 respondents are saying we don‟t have proper
complaint desk to tell our problems, but in this case network problem is major impact to payments bank
users.
Table 4.2.9 Customers Suffered from Online Fraud
Respondent found fraud No. of respondent
Yes 37
No 14
Total 51
Analysis:
The study analysis that the respondent is facing fraud like when they transfer fund that transaction will don‟t
be done success. Few respondents have respondent that they have not faced any fraud from payment banks.

CUSTOMERS SUFFERED FROM ONLINE

FRAUD
40 37
35
30
25
20
14
15
10
5
0
YES NO
Figure 4.2.9
Interpretation:
From the above table customers suffered from online fraud in this case the total respondents are 51 in
respondents 14 respondents are saying YES because they are suffered from online fraud and rest of the 37
respondents are saying NO they are saying we didn‟t suffer from online fraud so we want to know this
information the respondents are suffered from online fraud is less.
Table 4.2.10 Customers Experience about Payments Bank
Respondent experience No. of respondent
Good 30
Average 21
Bad 0
poor 0

Analysis:
The study analysis that customer is satisfied by the service of the payment banks. They are happy about the
service of payment banks.
CUSTOMERS EXPERIENCE ABOUT

PAYMENTS BANK
35
30
30
25
21
20
15
10
5
0 0
0
GOOD AVERAGE BAD POOR
Figure 4.2.10
Interpretation:
From the above table customers experience about payments bank in total 51 respondents the 30 respondents
are saying payments bank is good and the other rest of 21 respondents are saying average experience but no
one is saying bad and poor in this case because the payments bank services Is good.

PAYMENTS BANK RESPONDENTS BY EMPLOYEES:
Table 4.2.11 Name of The Bank
Respondents works in bank No. of respondent
Axis bank 1
Canara bank 1
SBI 4
Syndicate bank 1
UCO bank 1
Vijaya bank 1
Yes bank 1
Total 11
Analysis:
The above table the different bank respondents given by information the total respondents are 11. From this
table every bank they have own strategies and banking rules.

NAME OF THE BANK
1 1
1 1
1 1
AXIS BANK BANK OF BARODA CANARA BANK SBI

SYNDICATE BANK UCO BANK VIJAYA BANK YES BANK
Figure 4.2.11
Interpretation:
From the above table the total respondents of banks are 11. This information given by from different bank
employees under this axis bank respondent 1, bank of Baroda 1 respondent, canara bank 1 respondent, state
bank of India 4 respondents, syndicate bank 1 respondent, uco bank 1 respondent, vijaya bank 1 respondent
and yes bank also is one respondent about payments bank impact.

Table 4.2.12 Payments Bank Utilizing by Bank Employees
Payments bank utilizing by bank No. of respondents

employees
Paytm payments bank 36
Airtel payments bank 1
Jio payments bank 3
Aditya birla payments bank 11
Total 51
Analysis:
From the above table the bank employees are using different types of payments bank. In this total 11
respondents every respondent is using different one. But in this payments bank paytm payments bank is more
using by bank employees.

PAYMENTS BANK UTILIZING BY BANK EMPLOYEES

0
PAYTM PAYMENTS BANK JIO PAYMENTS BANK

AIRTEL PAYMENTS BANK ADITYA BIRLA PAYMENTS BANK
Figure 4.2.12
Interpretation:
From the above table the bank employees which payments bank they are using regularly even they have
regular bank account, in this the total 11 respondents in that 11 respondents 7 respondents are using paytm
payments bank, jio payments bank using by 3 respondents, airtel payments bank using by 1 respondents and
Aditya Birla payments bank Is no one using under this total 11 respondents. In this survey we want to know
paytm payments bank are more using by respondents.

Table 4.2.13 Banking Services to Customers More Than Payments Bank
Services by bank No. of respondents
Online transaction 9
High interest rate 6
High security 7
On spot response to customers queries 4
Total 11
Analysis:
From the above table the banks are what type of services providing to their customers more than payments
bank. In this total 11 respondents the respondents which one they are prefer more and which type of services
they are providing to customer satisfaction and customers attraction because bank should be differ from

payments bank than only customer will attract.
BANKING SERVICES TO CUSTOMERS MORE THAN PAYMENTS

BANK
ONLINE TRASACTION HIGH INTEREST RATE

HIGH SECURITY ON SPOT RESPONSE TO CUSTOMER QUERIES
Figure 4.2.13
Interpretation:
From the above figures 4.13 the multiple options of 4 services by bank the 11 respondents are select the
more than one options in that case they are selected as a 4 options in that 11 respondent‟s online transaction
is 9 respondents are saying online transaction we are providing, 6 respondents are saying high interest rate
providing by bank, 7 respondents are saying providing high security and 4 respondents are agreeing that to
providing on spot response to customer‟s queries. In this above figure the overall every respondent selected
multiple options one by one as per their services by banking to customers more than payments bank.

TABLE 4.2.14 Bank Rates Affect from Payments Bank
Bank rates affect No. of respondents
Yes 7
No 2
May be 2
Total 11
Analysis:
From the above table 4.14 from payments bank how the bank rates will get affect and, in this table, totally 11
respondents given the information about this question in this total respondent somebody saying YES and
somebody saying NO and left respondents saying MAY BE so in this we should know about major results.

BANK RATES AFFECT FROM PAYMENTS BANK
YES NO MAY BE
Figure 4.2.14
Interpretation:
From the above figures the bank rates affect from payments bank is the in that total respondents are 11 in
that 11 respondents 7 respondents are saying YES from payments bank our bank interest rate is affecting, 2
respondents are saying NO we are not affecting from the payments bank on bank interest rates and rest of the
2 respondents are saying MAY BE. Why they are saying may be means in private banks like axis bank, yes
bank etc. they are already introducing online transaction and online payments before introducing payments
bank in India so they cannot affect from this type of services from the payments bank.

Table 4.2.15 Bank Savings Affect from Payments Bank
Bank Savings Affect No. of Respondents
Yes 7
No 1
May be 3
Total 11
Analysis:
From the above table 4.15 the how bank savings affect from payments bank in the banking the total
respondents are 11 every bank employee given different types of information defends upon their banking
transaction and profits, some respondents are saying YES and some respondents are saying NO and some of
respondents are saying MAYBE so here different types of opinion is there.

BANK SAVINGS AFFECT FROM PAYMENTS BANK
1 7
YES NO MAY BE
Figure 4.2.15
Interpretation:
From the above figure 4.15 overall 11 respondents from that 11 respondents 7 respondents are saying YES in
bank savings affect from payments bank, 1 respondent is saying NO and 3 respondents are saying MAYBE.
In this case MAYBE all banks are not affecting from the payments bank like yes bank, axis bank, Indus land
bank etc. so this banks not get affect from the payments bank because in that private bank‟s technology is
using by them.

Table 4.2.16 Online Transactions in Bank through Percentage
In Percentage No. of Respondents
25% 0
50% 5
75% 6
100% 0
TOTAL 11
Analysis:
The table 4.16 in the bank‟s online transactions how many percentages they are doing on the measurement of
25%, 50%, 75%, 100% In this way the respondents are given information in this percentage we can easily
measure the online transaction effectiveness in the bank

700%
ONLINE TRANSACTIONS IN BANK THROUGH
PERCENTAGE 6
600%
5
500%
400%
300%
200%
100%
100% 75%
50%
25%
0 0
0%
1 2 Series1 Series2 3 4
Figure 4.2.16
Interpretation:
From the above figure 4.16 the how much percentage the banks are using in percentage so in this in 25% of
online transaction there is no even one bank also using this percentage so every banks are using more than
that, in 50% measure the 5 respondents are saying yes we are using 50% of online transaction in our banking
activity, in 75% measure the 6 respondents are saying using online transactions more, in 100% measure the
no one or there is no even one bank using 100% because lakh of knowledge to customers and fear about
security so maybe it will possible in future.

Table 4.2.17 Types of Online Banking Used by Bank
Types of online banking No. of respondents
Bank digital wallets 5
Online banking 3
Internet banking 3
Other services 0
Total 11
Analysis:
In the above table the in bank what type of online banking they are using because now days‟ different types
of online banking are available so in the total 11 respondents the all respondents are given different types of
online banking so we can easily know about banking development in online transaction.
TYPES OF ONLINE BANKING USED BY BANK

0
BANK DIGITAL WALLETS

ONLINE BANKING
INTERNET BANKING
OTHER SERVICES

Figure 4.2.17
Interpretation:
In above figure 4.17 the every banks using different types of online banking in total 11 respondents from
different banks in that case bank digital wallets 6 respondents are saying about their bank using their won
wallets like axis bank, state bank of India and other banks are using their own wallets like the axis bank
using axis pay and state bank of India using SBI pay, 3 respondents are saying online banking like yes bank ,
bank of Baroda and others bank are using online banking and finally 3 respondents are saying internet
banking so in this way the vijaya bank, canara bank are using this type of online banking and rest of the other
services there is no even on bank using this services.
Table 4.2.18 Text message updates from bank
Message updates No. of Respondents
Yes 11
No 0
Total 11
Analysis:
In above table 4.18 every bank providing text message updates after close every banking transaction in bank.
So why the text message want means for the customers awareness and to avoid the fraudulent activities in
their transaction in total 11 respondents the 11 are agreed this question.

TEXT MESSAGE UPDATES FROM BANK
YES NO
Figure 4.2.18
Interpretation:
In an above table the total from the 11 respondents the 11 respondents also saying YES because now a days
every one using the bank accounts for their savings to future so the bank also updates everting about their
bank details to customers for their awareness and no one saying NO because the banks proving information
through text messages and the bank are providing the mini statement to bank customers.
Table 4.2.19 Email updates from bank
Email updates No. of respondents
Yes 11
No 0
Total 11

Analysis:
The above table 4.19 every bank providing email updates to their customers in this case we should see who
all are registered their mobile number and email address with bank and who all are using email in their
smartphones for them the email updates will get from bank.
EMAIL UPDATES FROM BANK
YES NO
Figure 4.2.20
Interpretation:
From the above table 4.20 in this table from 11 respondents every 11 respondents are saying YES because
from all banks give email updates to customers but who all are registered their mobile numbers and email
address and no one saying NO because all are getting email updates from bank.

Table 4.2.20 Payments Bank Competing with Banks
Competing with Banks No. of Respondents
Advanced Technology 8
Door Step Services 5
UPI Payments 10
QR Code Payments 8
Total 11
Analysis:
From the above table 4.21 the payments bank how its competing with banks in Indian banking, in this above
case for questions multiple options is given so in this 1 respondent can choose 4 options also for their
banking preference. The payments bank is competing different way with bank but in this case, we want to
decide how its competing with the respondent‟s preferences.

PAYMENTS BANK COMPITING WITH BANKS

ADVANCED TECHNOLOGY DOOR STEP SERVICES
UPI PAYMENTS QR CODE PAYMENTS
26% 26%
16%
32%
Figure 4.2.20
Interpterion:
From the above figure from 11 respondents in this question multiple options given to employees because a
per their bank preference they are choose one by one so in this multiple options 8 respondents are responds
out of 11 in this 8 respondents the payments bank computing with their banks through advance technology, 5
respondents respond out of 11 they are saying the from payments bank 5 respondents or banks are affecting
the door step services from payments bank, 10 respondents are respond out of 11 respondents the payments
banks competing with banks through UPI(unified payment interface) payments yes now the government
introduce this services whatever in online transaction we should do through UPI only and 8 respondents are

respond out of 11 respondents the payments bank competing with the QR code payments in this present
situation the QR code payments is very popular so the customers using more payments bank.
Table 4.2.21 Payments Bank Great Potential in Future
Potential In Future No. Of Respondents
Yes 10
No 1
May Be 0
Total 11
Analysis:
From the above table the question about the payments banks has a great potential in future or not in this case
the from 11 respondents they are said their opinion.

PAYMENTS BANK GREAT POTENTIAL IN

FUTURE
YES NO MAY BE
9% 0%
91%
Figure 4.2.21
Interpretation:
From the above figure the payments bank great potential in future or not out of 11 respondents 10
respondents are saying YES because its youngsters are using more in this payments banks so we can easily
know it will be great potential in future and 1 respondent is saying NO in this case why they saying NO
because they have fear about online transaction because about fraudulent activities. And no one is saying
MAY BE in this survey.

FINDINGS
INTRODUCTION:
The source of the data is primary. The data collected by two sectors that one is customer and other is
employees of commercial banks.
The study has collected total respondent of around 65 in this 51 was customer respondent and 11respondent
are employee of commercial banks.
FINDINGS:
1. To study of affect from payments bank to bank
In this study analyzed the payments banks is affecting banks some methods like the interest rate and the
savings deposit in banking. In this study we want to know the payments banks is offering more interest rate
than banks for customer‟s savings deposit in payments banks. The payments bank for customer term deposit
providing till 7% but the banks providing only 4% to 5% only. And another type of affect is savings deposits
variation after payments banks introduced the youngsters are saving their deposits in payments banks till
1,00,000 so automatically the savings will decrease for banks.
2. To analyze positive and negative impact from payments banks
In this study analyzing of positive and negative impact by payments bank. Positive impact in the sense the on
spot online transact through UPI payments and QR code payments also they are introduced by the way for
customers it‟s very easy to transaction and negative impact from payments bank is mainly awareness is
affected and network error showing when customers using the payments banks while transaction
3. Customer satisfaction from both payments‟ banks and general banks

The study both payments banks and general banks respondents are using both accounts in their routine life
but the more preference by customers is payments banks because through payments banks applications easy
transaction is possible than general banking. In general banking the customers want to wait but in payments
bank there is no possibility to wait.
4. The study analysis the below 2, 00,000 income level people is more so in this study so a greater
number of customers using payments banks.
SUGGESTIONS:
1. From government side and from payments banks side they should provide more awareness about
payments banks through online media and other type of media.
2. The banks also update their banking transaction in online otherwise the banking customers will lose
their confidence about bank.
3. The banks should improve their server problem while online transaction.
4. The payments should regulate online fraudulent activities in online.
5. Without competition both general banks and payments banks should give proper information to
customers about interest rate, saving schemes etc.
CONCLUSION:
The study of analysis the impact from payments banks its can both negative and positive so the general
banks also upgrade the present scenario and should provide services as per that adaption old type of methods
it‟s not working here, in now a days the payments banks is more popular and the payments bank is giving
more advanced services for that the people more attracting payments bank than bank. But in this payment
bank some loophole is there so that should be corrected by government of India.
In future the payments banks will be great potential because now a days all are using smart phones so
through applications everyone will use in future. And the payments bank expanding to rural area also. Both
rural and urban people are coming front to use the payments bank but they have regular bank account also.

BIBILOGRAPHY:
Dr reena agarwal. (2016). payments bank redefining indian banking: an empirical study . JIDNYASA, 1-7.
chanderprabha. (2017). payments bank cashless economy as well as for financial inclusion . international journal of
research-GRANTAALAYAH, 160-178.
alagh jainta itah (2014). imapact of cashless banking on banks profitability evidence from nigeria . asian journal of
finance and according , 1-376.
seema joseph . (2017). customers awarness on payments bank, the latest IT enabled indian banking connecting
people-an empirical study . international journal of creative research thoughts , 81-90.
shalini mittal . (2017). an empirical study on customer preference towards payments bank over universal banks in
delhi NCR. information technology and quantitative managment , 463-470.
rangsan nachai. (2013). the impact of internet banking services an customer satisfaction in thailand . international
journal of humanities and managment science , 1-105.
Dr v ramesh naik (2018). A study on role of payments bank in india- financial inclusion . international conference on
recent adavnces in engineering science and managment , 156-164.
Dr sonal purohit (2017). payments bank a revalution step in india for financial inclusion . prestige international
journal of managment and IT sanchayan , 1-27.
anahita singh. (2019). payments banks on improving financial inclusion in india . international journal of business and
managment invention , 1-83.
vaishnavi, J. (2015). payments bank-an inovative intiative by RBI. IOSR journal of business and managment , 60-65.

ANNEXURE:
QUESTIONNAIR OF EMPOYEE OF COMMERCIAL BANKS.
Impact of Payments Bank in the Digital World of Banking

This research is being conducted for knowledge purpose and the details of the respondents shall not be used
or disclosed anywhere.
Name of the Respondent
Your answer
Name of the Bank
Your answer
Which payments bank has been utilized by your bank employee?

Paytm payments bank
Jio payments bank
Aditya birla payments bank
Airtel payments bank
What type of facility are you giving to your customers other than Payments Bank?
Online transaction
High interest rate
High security
On spot response to customer queries
Are the bank rates getting affected because of Payments Bank?

Yes
No
Maybe
Are the bank savings getting affected due to Payments Banks?

Yes
No
Maybe

How much percentage of your transactions are online based?

25%
50%
75%
100%
What type of Online Services is being used by the Bank?

Bank digital wallets
Online banking
Internet banking
Other services
Does your bank provide text message updates to the customers after every Online
Transaction?
Yes
No
Does your bank provide Email updates to the customers after every Online
Transaction?
Yes
No
Maybe
In what way are Payments Banks competing with your Bank?

Advanced technology
Door step services
UPI payments
QR code payments
Do you think Payments Bank has a great potential in the future?

Yes
No
Maybe

QUESTIONNAIR TO CUSTOMER
Payment Banks Impact on Digital world in Banking
This research is being conducted for knowledge purpose and the details of the respondents shall not be used
or disclosed anywhere.
Name of the Respondent
Your answer
Age of the Respondent

0-20
21-50
51-80
81-100
Other:
Gender
Male
Female
Others
Income
Below ₹2,00,000
₹2,00,000-₹5,00,000
₹5,00,001-₹8,00,000
Above ₹8,00,000
Do you have any account in a bank?

Yes
No

Are you a frequent user of Payment Banks?

Yes
No
Are you a Frequent users of Internet Banking? *
Yes
No
Which of the following Payment Banks do you use frequently? *

Paytm payment banks
Airtel payment bank
Jio payment bank
All the above
What type of problem have you faced with Payment Banks? *

Network problem
Lack of knowledgw how to use
Fradulent activities
No customer compliment desk
Have you ever suffered an online fraud? *

Yes
No
How was your experience after using Payment Banks? *

Good
Average
Bad
Poor
Any suggestion you would provide to improve the Payment Bank service. *
Your answer

SESHADRIPURAM FIRST GRADE COLLEGE

PG DEPARTMENT OF COMMERCE AND MANAGEMENT
YELAHANKA, BANGALORE- 560064
PROJECT REVIEW REPORT
Name: M.R.GANESHA
Registration number: 17DKCOM018
Name of the Guide: Prof.AAFAQ AHMED
Title of the Project:
“PAYMENTS BANK IMPACT ON DIGITAL WORLD IN BANKING ”
Date Topics Discussion Signature of the Signature of the
Student guide
13/02/2019 Title Discussion
14/02/2019 Finalization of the

title
16/02/2019 Submission of
synopsis
18/02/2019 Discussion and
correction of
synopsis
22/02/2019 Discussion of project
and chapters
13/03/2019 Submission of 1st and

2nd Chapter

23/03/2019 Submission of 3rd

chapter
25/04/2019 Submission of 4th
chapter
14/05/2019 Submission of 5th
chapter
23/05/2019 Submission of final
project
Signature of Director
(Dr. Vijayakumar A B)

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“PAYMENTS BANK IMPACT ON DIGITAL WORLD IN BANKING”

Dissertation Submitted in Partial Fulfillment of the Requirements for The

Under the guidance of

POST-GRADUATE DEPARTMENT OF COMMERCE AND MANAGEMENT

This is to certify that the dissertation entitled “PAYMENTS BANK

IMPACT ON DIGITAL WORLD IN BANKING” which has been

submitted in partial fulfillment for the award of M. Com degree by

GANESHA M R (reg.no.17DKCOM019) under the guidance of Prof.

for the award of any other degree/diploma of any University or institution.

Place: Bangalore prof. Aafaq Ahmed

I GANESHA M R, student of Seshadripuram first grade college, hear by

declare that the project report entitled “PAYMENTS BANK IMAPCT ON

DIGITAL WORLD IN BANKING”submitted to the Bangalore university

in partial fulfillment of requirements of M.Com degree is a bona fide work

carried under the guidance of Prof. Aafaq Ahmad, professor, PG department

of Commerce and Management, Seshadripuram First Grade College,

Bangalore. This report has not been submitted to any institution or

University for the award of any degree.

Place: Bangalore GANESHA M R

Date: (Reg.No 17DKCOM019)

I express my gratitude to Dr. S N Venkatesh, principal and Dr. Vijay

Kumar, Director, PG department of commerce and Management,

Seshadripuram First Grade College, Bangalore, for her encouragement and

support throughout the completion of this study.

Professor of Seshadripuram First Grade College, PG department of

Commerce and Management, for their guidance, encouragement, support

and generous help to make this project work successful.

I would like to thank Bangalore University for giving me an opportunity to

undertaken a project work.

affecting in banking both negative and positive response.

responders and 11 respondents from banking employees.

KEY WORDS: UPI payments, payments banks applications through mobile.

CHAPTER CHAPTER NAME PAGE

II. Review of Literature and Research 17-22

III. Evolution of Postal Banks 23-27

IV. Data Analysis and Interpretation 28-60

V. Summary of Findings, Suggestions 62-63

4.2 Gender of respondents 30

4.3 Income level 31

4.4 Customers having account in bank 32

4.5 Frequent users of payments bank 34

4.6 Frequent users of internet banking 35

4.7 Types of payments bank used by customers 36

4.8 Problems faced by payments bank 38

4.9 Customers suffered from online fraud 39

4.10 Customers experience about payments bank 40

4.11 Name of the banks 42

4.12 payments bank utilizing by bank employees 44

4.13 Banking services to customers more than payments 46

4.14 Bank rates affect from payments banks 48

4.15 Bank saving deposit affect from payments banks 50

4.16 Online transaction in banks through percentage 52

4.17 Types of online banking used by bank 54

4.18 Text message updates from bank 55

4.19 Email updates from bank 56

4.21 Payments bank great potential in future 60

PG Department of Commerce and Management SFGC, Yelahanka 1

1.2 PAYMENSTS BANKS IN INDIA