RBI gives licence for 11 payments banks

[P.J.]

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RBI gives licence for 11 payments banks

MUMBAI, AUG 19:
Paving the way for revolutionising cashless payments services in the country, the Reserve Bank of India on Wednesday granted payment bank licences to 11 firms.

This includes telecom companies Vodafone and Airtel; non-banking financial company Cholamandalam Distribution Services Ltd; large conglomerates Reliance Industries and Aditya Birla Nuvo; and individuals Vijay Shekhar Sharma, founder of Paytm, and Dilip Shanghvi, Managing Director of Sun Pharmaceuticals.

The Department of Posts, Fino Paytech, Tech Mahindra and National Securities Depository Ltd also made the cut.

Of the 41 entities that applied for a licence, the prominent names that did not make it in this round include Future Group Founder Kishore Biyani, Videocon d2h and MG George Muthoot.

Payments banks differ from conventional banks as they are not allowed to lend to customers or issue credit cards. They can, however, accept deposits of up to ₹1 lakh and can offer current and savings account deposits. They can also issue debit cards and offer internet banking.

Rollout plan

While the 11 companies have been given 18 months to comply with all the conditions laid out by the RBI, most of them have already put in place a robust roll-out plan. Telecom operators with their vast retail presence would be the first off the block.

Sunil Sood, Managing Director & CEO, Vodafone India, said, “The payment bank licence will enable us to offer a more comprehensive portfolio of banking and financial products and services, accelerating India’s journey into a cashless economy.” Norwegian telecom company Telenor announced that it was partnering Dilip Shanghvi along with IDFC.

Reliance Industries and Aditya Birla Nuovo will ride on their respective telecom ventures Reliance Jio and Idea Cellular. They would also leverage their existing businesses in retail and financial services to quickly roll out payment bank services.

For entities like Paytm, Fino PayTech and Cholamandalam, this is a natural progression of what they are already doing.

Vijay Shekhar Sharma, founder and CEO of Paytm, said: “It is truly a privilege to be one of the youngest ones in this lot of 11. We believe that led by mobile and data analytics technology, we will be able to change the face of financial inclusion opportunity in India. It is about bringing half a billion Indians to the main stream of economy.”

Vellayan Subbiah, MD, Cholamandalam Investment and Finance, said, “This is a transformative step in fulfilling the financial inclusion goal of the government and the RBI. We currently have over 534 branches spread across the country and a captive base of over 7.5 lakh customers, which is an immediate opportunity that can be tapped into.”

“I am very happy to learn that the Postal Department has been given a payment banking permission. I have been trying since I became the Minister to energise and make the vast network of Postal Department for financial digital inclusion and e-commerce activity. I would expect the Postal Department to prepare itself properly and effectively for this,” said Telecommunications and IT Minister Ravi Shankar Prasad.

(This article was published on August 19, 2015)


http://www.thehindubusinessline.com...licants-for-payments-banks/article7557836.ece

 

[P.J.]

What is Payment Bank and how does it work

What is Payment Bank and how does it work

What is Payments bank


Payments bank licence will allow companies to collect deposits (initially up to Rs 1 lakh per individual), offer Internet banking, facilitate money transfers and sell insurance and mutual funds.



What is the objective of the payment bank?

The objectives of setting up of payments banks will be to further financial inclusion by providing small savings accounts and payments/remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users.

Do you get debit/credit cards for transaction?

No, you can't get credit cards for transaction but the payment banks can issue ATM/debit cards.



What will payment banks do for the banking system

Such banks will ensure more money comes into the banking system and will help reach out to people in rural areas. Moreover, the payments bank licence will enable the network of 1,54,000 post offices (including 1,30,000 rural post offices) to offer banking services to the masses in the country.

What about applying for loans through payment banks?

The RBI guidelines say that the payments bank cannot undertake lending activities. So if you want to apply for loan, you will have to go to the regular banks which issue loans.



Is there any greviance body?

The RBI guidelines clearly say that the banks should have a high powered Customer Grievances Cell to handle customer complaints. The operations of the bank should be fully networked and technology driven from the beginning, conforming to generally accepted standards and norms.




First Published: Thursday, August 20, 2015, 09:38


http://zeenews.india.com/business/news/finance/what-is-payment-bank-and-how-does-it-work_134168.html

 

[yesmohan]

Moreover, the payments bank licence will enable the network of 1,54,000 post offices (including 1,30,000 rural post offices) to offer banking services to the masses in the country.

Post Office already offers these services except issuing debit card.
The plight senior citizens having accounts with post offices could not be explained in words.
If any body wants cash withdrawal of Rs. 50,000/- or 1 lakh one has to inform one day in advance. In an emergency one could not have easy access of cash withdrawals. With a lot of postman promotes in, the counter staff are also not that much customer friendly.

 

[krish44]

The upshot of opening these payment banks ,conventional banks will lose revenue.

There is a move also to give licences to new small banks.

if payment banks work in conjunction with large banks playing a complementary role, it would be nice.

PSU banking sector is going to face interesting times.

more than 50000 retiring in next two years , NPAs escalating due to lack of demand in some sectors like steel , we are in for troubled times.

 

[yesmohan]

Payment banks .... the very name indicates they can only collect deposits; not empowered to deal with advance (loan) portfolio at present.

The RBI guidelines say that the payments bank cannot undertake lending activities. So if you want to apply for loan, you will have to go to the regular banks which issue loans.

How the interest will be paid without lending and earning. RBI will come out again with certain amendments.

 

[vgane]

Payment banks .... the very name indicates they can only collect deposits; not empowered to deal with advance (loan) portfolio at present.

The RBI guidelines say that the payments bank cannot undertake lending activities. So if you want to apply for loan, you will have to go to the regular banks which issue loans.

How the interest will be paid without lending and earning. RBI will come out again with certain amendments.

How to prevent the deposits reaching the parent promoter who has other businesses,,,A business man is a business man..He may swindle this money..This may become another Royapettah benefit fund despite putting the best Governance mechanism..I am not a naysayer..But we require very strong watch dogs to control these payment banks!

 

[yesmohan]

Payment Banks would be scheduled commercial Banks and RBI will monitor their functions.
Payment Banks, as it is stated,could not sanction and disburse any loan.

 

[tbs]

hi

still a good sign....a best customer service required......

 

[yesmohan]

hi

still a good sign....a best customer service required......

With new recruits, in good ambience..... service would be satisfactory.
But interest rates could be as same as in any of the PSU Banks. (within the overall ceiling limit prescribed by RBI)

 

[krish44]

Like youngsters do job hopping, many private companies do bank hopping.

They borrow initially from from govt banks like SBI or PNB and they pass on all the risks in their new projects to them. Once , the projects are operational, they switch to

private banks which give them better terms. client stealing is the accepted practice for private banks.

 

[vgane]

Like youngsters do job hopping, many private companies do bank hopping.

They borrow initially from from govt banks like SBI or PNB and they pass on all the risks in their new projects to them. Once , the projects are operational, they switch to

private banks which give them better terms. client stealing is the accepted practice for private banks.

Krish,

I am always for PSU's compared to Private Banks & NBFC's at any stage..Whenever I take a loan SBI or LIC Home Finance are always top...They reduce rates when there is a reduction in Bank rates and pass on the benefits very religiously..NBFC such as Dewan Housing (DHFL) have not reduced rates as much as SBI despite Government mandate

 

[yesmohan]

Bigger the bank , 'finer' will be the interest rate.

 

[krish44]

Krish,

I am always for PSU's compared to Private Banks & NBFC's at any stage..Whenever I take a loan SBI or LIC Home Finance are always top...They reduce rates when there is a reduction in Bank rates and pass on the benefits very religiously..NBFC such as Dewan Housing (DHFL) have not reduced rates as much as SBI despite Government mandate

vganeji

getting loan from sbi or lic is a time consuming process. one can always get it from HDFC fast as they are dedicated to housing finance and are very professional in processing and

fast in disbursal

If the loans are a bit more expensive, later one can always transfer it to a nationalised bank after collecting possession of the flat .

advantage of HDFC is one can get a loan in one city and buy in another city within the country.Their loan processing and disbursal is neat

It reduces the hassles.

 

[yesmohan]

In SBI THE PROCESSING CHARGES ARE LESSER BESIDES NO HIDDEN CHARGES.

 

[krish44]

In SBI THE PROCESSING CHARGES ARE LESSER BESIDES NO HIDDEN CHARGES.

I agree loans from nationalised banks and LIC might be cheaper.

Most of these banks treat people who apply for housing loans like dirt.

also they are very inefficient in loan processing.

it is not worth the hassle .

of course if you happen to know a friendly bank manager one can try it.

I had only bad experiences with banks.

Even fixed deposits, most banks behave as if they are doing you a favour by accepting deposits. their rates change on very frequent basis.

Thesedays I send my representatives to take care of my requirements in banks instead of sucking upto them

 

[vgane]

Krish,

My experience with public sector Banks & LIC, ranges good to great, in last 5 years..They also have an ombudsman..In case of any issue they get it resolved timely

 

[yesmohan]

Krish,

My experience with public sector Banks & LIC, ranges good to great, in last 5 years..They also have an ombudsman..In case of any issue they get it resolved timely

Absolutely correct.
But what Mr. Krish says is true to some extent. After creation CPCs ( Centralised processing Centres) for each category of loans, the Branch Manager has no "sayings".
Personalised touch is lost.

 

[vgane]

Absolutely correct.
But what Mr. Krish says is true to some extent. After creation CPCs ( Centralised processing Centres) for each category of loans, the Branch Manager has no "sayings".
Personalised touch is lost.

CPC was created, I guess to prevent corruption..They go by the rule book...

 

[yesmohan]

CPC was created, I guess to prevent corruption..They go by the rule book...

CPCs are created to offer quality to service with trained people at one place.It helps the bank to reduce overheads on manpower.

At metro centres more than 100 branches are are attached to a Housing loan CPC with a staff strength of 50 or around.

The branches are functioning as retail sales centres and market the loans.

The staff at CPCs will not bend the rules as they may not have human touch and know the real value of customers.

 

[V.Balasubramani]

India's banks on the cusp of a revolution? Wait and watch

If things play out the way the regulator, the Reserve Bank of India, has planned, the country will go a long way in taking banking to the majority of Indians who still remain outside its fold, says Subir Roy.

RBI Governor Raghuram Rajan and other officials listen to a question during a news conference after the bi-monthly monetary policy review in Mumbai. Photograph: Reuters


What has happened in the last few weeks, and what will follow as a consequence, will bring about a major change in the Indian banking scene - a change which has the potential to be as big as bank nationalisation.

If things play out the way the regulator, the Reserve Bank of India, has planned, the country will go a long way in taking banking to the majority of Indians who still remain outside its fold.

The revolution which began in 1969 and played a major role in taking up the national savings rate, thus enabling the post-liberalisation high growth phase, had stalled in terms of outreach.

The issue of payments bank licences to as many as 11 entities will change the face of the remittance business in the country.


Read more at: http://www.rediff.com/business/colu...-of-a-revolution-wait-and-watch-/20150826.htm

 

[yesmohan]

An addition of licenses to 11 paying Bankers would not make any revolution in the banking industry.
As coming up of 11 new stores in the locality may minimise the distance to be travelled from home but not in the prevailing prices.

 

[V.Balasubramani]

[h=1]SBI turns positive about payment banks[/h]Mumbai: In a U-turn from her earlier stated position on the entry of payments banks, SBI chief Arundhati Bhattacharya has said there is nothing negative about them and that there is a huge opportunity for the entire banking system.

“I want to very clearly say that there is nothing to be negative about the payments banks. Because whenever you have challenge, the other side of the coin is an opportunity. And I think if we don’t realise it then nobody else would do so,” Bhattacharya said at the annual bankers summit, Fibac, here last evening.

“With this new competition, I think there is a huge opportunity out there for the entire banking sector. And this opportunity is for us to take,” she said.

Last week, the RBI had given in-principle approval to 11 entities, such as Reliance, Airtel, Vodafone, Birla Group, Mahindra, among others, to set up payment banks.

On two occasions, Bhattacharya had raised concerns over the entry of payments banks and said these entities could eat into the share of the existing banks.

It would be a dog-eat-dog market if the deep-pocket corporates, which have bagged the payments bank licences, unleash a rate war, she said at the same event earlier on.

Read more at: http://newstodaynet.com/business/sbi-turns-positive-about-payment-banks

 

[yesmohan]

What is agitating in the mind of Mrs Bhattacharya of SBI besides all other Chairmen of the Public sector Banks, perhaps may be the skill of technology with which some of the new entrants like Reliance, Airtel, Vodafone, Birla Group, Mahindra etc. come to the field of Banking.

The new entrants with all their back ground of technological skills would outwit the PSBs which are mostly worn out horses in the area of customer service with halh of their staff as dead stock.

There is every prospect that younger generation would be attracted by the techno- savy new entrants.

 

[sarang]

Payments banks differ from conventional banks as they are not allowed to lend to customers or issue credit cards. They can, however, 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.

With such limitations, payment banks are not a big threat to established banks,if they too become agile and offer better service and incentives. Ease of transaction is the key.

 

[krish44]

With such limitations, payment banks are not a big threat to established banks,if they too become agile and offer better service and incentives. Ease of transaction is the key.

For nationalised banks to become agile, they need to get rid of the dead wood.

They need to select young IT/finance savvy youngsters to replace them.

They need to bring in experienced professional from private sector to head them.

Govt should keep a safe distance from them and allow professionals to do their job

Govt should not thrust unviable social sector programs on banks for implementation.