New Delhi: NSDL Payments Bank Limited started operations on Monday, the seventh payments bank since the central bank gave approval in principle to 11 applicants in August 2015.

With the launch, Vodafone m-Pesa Ltd is the only applicant left to set up its payments bank. Three applicants have surrendered their licences.

“NSDL Payments Bank Limited has commenced operations as a payments bank with effect from October 29, 2018. The Reserve Bank has issued a licence to the bank under Section 22 (1) of the Banking Regulation Act, 1949, to carry on the business of payments bank in India," a press release by Reserve Bank of India (RBI) stated on Monday.

Payments bank is a differentiated bank providing a limited range of products, such as acceptance of demand deposits and remittances of funds. It can accept a restricted deposit, which is currently limited to 1 lakh per customer. However, these banks cannot extend loans or issue credit cards.

The launch comes at a time when other payments banks are under scrutiny of the RBI regarding compliance with operating guidelines.

Last week, after almost five months of being barred from adding new customers, Fino Payments Bank, one of India’s first payments banks, was allowed to open new accounts by the RBI after it submitted a compliance report to the central bank. Fino Payments Bank had been unable to enrol new customers since the end of May after the RBI found the bank to be non-compliant with the operational guidelines laid down by it.

Paytm stopped enrolling new customers on 20 June following an audit by the RBI, which made certain observations about the process the company followed in acquiring new customers and its adherence to know-your-customer (KYC) norms.

Other payments banks that have started operations are India Post Payments Bank, Airtel Payments Bank, Aditya Birla Idea Payments Bank and Jio Payments Bank.

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