TABLE OF CONTENTS
Sr. No. Particulars Page number
1 Introduction 1
2 Guidelines 1
3 Impact 7
4 Conclusion 7
5 Bibliography 8

INTRODUCTION
On July 17, 2014, RBI issued draft guidelines for small banks and payment banks. Payment banks and small banks are “niche” or “differentiated” banks; with the common objective of furthering financial inclusion. While small banks will provide a whole suite of basic banking products, such as, deposits and supply of credit, but in a limited area of operation, payments banks will provide a limited range of products, such as, acceptance of demand deposits and remittances of funds, but will have a widespread network of access points particularly to remote areas, either through their own branch network or through Business Correspondents (BCs) or through networks provided by others. They will add value by adapting technological solutions to lower costs.
GUIDELINES:-
• Purpose
There is a need for transactions and savings accounts for the underserved in the population. Also remittances have both macro-economic benefits for the region receiving them as well as micro-economic benefits to the recipients. to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users, by enabling high volume-low value transactions in deposits and payments / remittance services in a secured technology-driven environment.
The objectives of setting up of small banks and payment banks will be for furthering financial inclusion by (i) provision of savings vehicles to underserved and unserved sections of the population, and (ii) supply of credit to small business units, small farmers, micro and small industries, and other unorganised sector entities, in their limited areas of operations, through high technology-low cost operations through small banks. Higher transaction costs of making