The success of the Jan Dhan Yojanasince the scheme was launched has meant that opening bank accounts is no longer as lucrative as it was expected to be, forcing payment banks to figure out other alternatives and the main factor is the Payments bank face a blanket ban on any type of lending.

Paytm and Airtel payments banks also had to suspend new account openings after they were accused of violating the KYC process mandated by RBI
 

The future of payment banks is uncertain and while the business will expand and evolve in time, they would require regulatory and government support to achieve their objectives, said a report by State Bank of India (SBI).

· The report said that recently, Aditya Birla Payments Bank (ABPB) announced shutting down its operations from 18 October, 2019 citing unanticipated developments in the business landscape that have made the economic model unviable. On 15 July, Vodafone m-Pesa had also shut shop.

· The payments bank model was conceptualised by Reserve Bank of India (RBI) on recommendation of the Nachiket Mor committee for furthering financial inclusion by providing small savings accounts and payments services to unorganised sector entities.

· “However, it seems to have failed to achieve the stated objectives, as only 4-PBs are operational out of the 11 licensed players. In 1990s also, RBI had made an attempt to create Local Area Banks (LABs) that are currently facing a host of issues," the report said.

Payments bank face a blanket ban on any type of lending and are required to maintain a cash reserve ratio (CRR), statutory liquidity ratio (SLR) on the outside liability. Moreover, they cannot accept deposits higher than ₹1 lakh.

Some of the suggestions to revive the banks, according to the SBI report, include arrangement with universal banks to automatically transfer funds in accounts exceeding ₹1 lakh; access to Aadhaar-based KYC, as manual KYC is at least three times in terms of cost to e-KYC; RBI should allow payments banks to tie up with third-party services to cross sell products, as margins are small, so scale is very important.

A recent news on One97 Communications, the parent of Paytm and Paytm Money, is to make an additional Rs 250 crore investment in the wealth management platform in the next 12-18 months to address it’s user base of 2.5 million and 1 million monthly active users, Paytm Money is now aiming to foray into the low- cost broking model.

The investment may be the reason Paytm Money is in talks with Alibaba’s Ant Financials and SoftBank to raise up to $1.2 billion at a valuation of $5 billion. Now,a question comes on when they see it is not going fine, then why many new players are planning to join the said loss league ? The question remain unanswered.

Now another news is running around on , WhatsApp is set to launch its P2P payments system later this year, beginning in India and has been testing the system in India for the past year, where the app has 400 million users.

The idea behind WhatsApp Pay is to make transferring cash as easy as sending a message. Mark Zuckerberg ,CEO-Facebook controlled WhatsApp said , at the firm's developer conference, “Payments is one of the areas where we have an opportunity to make it a lot easier. I believe it should be as easy to send money to someone as it is to send a photo."