Reliance
Industries, Airtel, Vodafone and India Post are among the 11 applicants given
approval to set up payments banks by the Reserve Bank of India.
The
11 applicants granted in-principle approval to start a payments bank are ---
Reliance Industries, Tech Mahindra, Aditya Birla Nuvo, Airtel M Commerce
Services, Department of Posts, Fino PayTech, National Securities Depository Ltd
(NSDL), Vodafone m-pesa , Cholamandalam Distribution Services and among
individuals are Sun Pharma chief Dilip Shanghvi and PayTm founder Vijay Shekha
Sharma, the list on the RBI website said.
The
Reserve Bank had received 41 applications for payments banks by end of deadline
in February this year.
“The
Committee of the Central Board (CCB) of RBI has selected entities with
experience in different sectors and with different capabilities so that
different models could be tried. It did ensure that all the selected applicants
have the reach and the technological and financial strength to service hitherto
excluded customers across the country.
“Nevertheless,
the in-principle approvals are subject to the condition {(15 (v)} in the
guidelines, including any developments in on-going cases,” RBI said in a
statement.
It
also said that going forward, the Reserve Bank intends to use the learning from
this licensing round to appropriately revise the Guidelines and move to giving
licences more regularly, that is, virtually “on tap”. The RBI believes that
some of the entities, who did not qualify in this round, could well be
successful in future rounds.
“At
its meeting on August 19, 2015, the CCB went through the applications, informed
by the recommendations of the EAC and the ISC, and approved the announced list
of applicants,” the statement further said.
Full
service bank
RBI
added that in arriving at the final list, the CCB noted that it would be
difficult at this stage to forecast the most successful likely model in the
emerging business of payments. The CCB further noted that payments banks cannot
undertake lending, and therefore believed that the payments bank would not be
subject to the same risks as a full service bank. Therefore, the CCB evaluated
applicants to assess whether there would be unacceptable risk even to the
narrower functions of a payments bank.
Payments
banks can accept deposits of up to Rs. 1 lakh and can offer current and savings
account deposits. They can also issue debit cards and offer internet banking.
But they are not allowed to lend or issue credit cards.
During
the Budget, the Finance Minister said, “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 will create a framework for licensing small banks and other
differentiated banks. Differentiated banks serving niche interests, local area
banks, payment banks etc. are contemplated to meet credit and remittance needs
of small businesses, unorganized sector, low income households, farmers and
migrant work force.”
Guidelines
The
Guidelines for Licensing of Payments Banks were first issued on November 27,
2014 after the Union Budget 2014-2015 presented on July 10, announced setting
up of differentiated banks.
The
process for selecting the applicants was detailed scrutiny undertaken by an
External Advisory Committee (EAC) under the Chairmanship of Dr. Nachiket Mor,
Director, Central Board of the Reserve Bank of India and was formerly with
ICICI Group.
“The
recommendations of the EAC were an input to an Internal Screening Committee
(ISC), consisting of the Governor and the four Deputy Governors. This Internal
Screening Committee prepared a final list of recommendations for the CCB, after
independently scrutinising all the applications,” as per RBI.
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