What is the difference between Payment Banks and Small Finance Banks?

Sr. No. Payment Bank Small Finance Bank 1. Payment Bank can receive deposits and remittances but cannot lend. Small Finance Bank can lend to small business units, micro and small industries and small and marginal farmers. 2. Payment Bank can receive deposit from a customer which should not exceed ₹2.00 Lacs. Small Finance Bank can provide basic services of accepting deposits and lending. 3. Payment Bank cannot give loans and cannot issue credit cards but can issue ATM/Debit Cards. No restriction of area of operation of Small Finance Banks. 4. Payment Bank can distribute non-risk financial products such as Mutual Fund and Insurance. Loan portfolio to the extent of 50% or more should constitute loans and advances of up to ₹25.00 Lacs. 5. Payment Bank focus on mainly on digital payments and savings. Focus on broader role, including savings, credit, and financial products for underserved segments. 6. Examples: Paytm Payments Bank, Airtel Payments Bank, India Post Payments Bank. Examples: AU Small Finance Bank, Ujjivan Small Finance Bank, Jana Small Finance Bank.