These banks can start operations with a capital of just Rs 50 crore and will provide services including deposits and payments but cannot give loans
GN Bureau | June 13, 2014
The country could soon get its first payments bank offering services including deposits and payments but excluding credit services, Reserve Bank of India deputy governor HR Khan has said. The idea of rolling out payments banks, to further the goal of financial inclusion, was first mooted by an RBI committee headed by Nachiket Mor which had submitted its report in January.
Payments banks can be set up with a capital base of Rs 50 crore, all of which will be invested in government securities thus reducing the risk element. In comparison, full-service banks, which can also extend loans, require an entry capital of Rs 500 crore, according to RBI guidelines.
According to the recommendations of the Mor panel, payments banks could be created by converting prepaid payment issuers (PPIs) which provide cards that can be used by customers to make payments to the extent of the money stored in them. At present, there are 27 PPIs operating in the country, including Airtel mCommerce Services Ltd., Itz Cash Card Ltd and Oxigen Services (India) Pvt. Ltd.
Read Nachiket Mor interview here
In the recent times, the central bank has also been talking about adopting a differentiated licence regime where different players can specialize in different kinds of banking operations. The establishment of payments banks means that the RBI is slowly inching towards that goal. In fact, RBI governor Raghuram Rajan had also suggested that India Post, one of the 23 applicants to not be given a bank licence in April, could look at entering the sector via the payments bank route. The apex bank had also decided to make the licence issuing process more frequent so as to
Before privatisation and corporatisation, the Indian Railways need to undertake major reforms including commercial accounting, decentralisation and human resource among others, said Bibek Debroy, economist and member, NITI Aayog at Railways Reforms and Governance Conclave organised by Governance Now on Fri
NTPC Ltd has raised Rs 2,000 crore through green masala bonds in overseas market under its $4 billion medium term note programme, union minister Piyush Goyal informed the Lok Sabha. The proceeds of these bonds will be used for financing renewable energy projects in accordance with applicable
It’s been over a month since the power centre in Tamil Nadu shifted from Poes Garden to Greenways Road in Chennai. The thirteenth chief minister of the state, Edappadi K Palanisami, is taking baby steps to bring about a change in the state which has been battling political uncertainty for the past fe
When her husband died last year, 60-year-old Chakkamma was not sure whether she would be able to have some money of her own: she has a son who looks after her, but she wanted to maintain a degree of independence. Opportunity came knocking when the Tamil Nadu government, as part of its Pudhu Vaazhvu (or new
Should Shiv Sena MP Ravindra Gaikwad be arrested for assaulting an Air India employee?
The Railways was unable to meet its operational cost of passenger and other coaching services. During 2014-15, there was a loss of Rs 33,821.70 crore on passenger and other coaching services. The freight services earned a profit of Rs 38,312.59 crore which indicated that 88.28 percent