RBI gives licence for 11 payments banks

[tbs]

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hi

many of them tech internet companies....so netbanking/internet services may be better....

 

[sangom]

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.

The so-called skill and tech-savviness etc., does not often get translated into better customer service, even for the genxt people. These young tech-savvy fellows are hot-headed usually and treat their customers like their slaves; they also show open contempt to the old people because the old people will not easily understand many of the new world jargon. At the end, I also heard that amounts deposited as FDs sometimes vanish into thin air because all records are centralized in the computer of the nodal office, covering hundreds of branches and a FD receipt will be received after 10 or 15 days direct from the nodal office. Those who can fight on the basis of the temporary cash receipt issued by the branch, may get a FD with a new date (and the bank gets the money free for so many days!) but others are taken for a ride!
Old PSBs have, therefore, not much to be afraid of the payment banks. The problem for the PSBs is not the deadwood but their NPAs.

 

[yesmohan]

The so-called skill and tech-savviness etc., does not often get translated into better customer service, even for the genxt people. These young tech-savvy fellows are hot-headed usually and treat their customers like their slaves; they also show open contempt to the old people because the old people will not easily understand many of the new world jargon. At the end, I also heard that amounts deposited as FDs sometimes vanish into thin air because all records are centralized in the computer of the nodal office, covering hundreds of branches and a FD receipt will be received after 10 or 15 days direct from the nodal office. Those who can fight on the basis of the temporary cash receipt issued by the branch, may get a FD with a new date (and the bank gets the money free for so many days!) but others are taken for a ride!
Old PSBs have, therefore, not much to be afraid of the payment banks. The problem for the PSBs is not the deadwood but their NPAs.

Banks like, SBI, Canara Bank etc. used to hand over FD receipts over the counter with value date.

Even if the customer do not turn up on the due date for renewal, the old deposit will be rolled over for a further period of the original 'term'.

Customer service is ,again ,a subjective concept,the yard stick differ from the customers point of view.
Again in NPAs , only the loss assets could not be recovered fully.
But most of the sub-standard assets could be recovered in full by realisation of securities.

 

[Vaagmi]

1. There is not going to be any great earth shaking event in the banking sector with the entry of payment banks.

2. Take our old cooperative societies and add a lot of technology and you have the payment bank branch.

3. Since the maximum balance per account will be only Rs. 1 lac and the required minimum statutory reserve will be a must, the funds available for investment by these banks will be meagre and the return will not be sufficient to sustain a network of branches. They will be weighed down by cost considerations even if the RBI stipulates a reduced CRR for these Banks or replaces it with a kind of guarantee by another larger bank.

4. It is unwise to stipulate that these banks can not lend. Without lending earning potential will become very low. Even if the new banks go for automated kiosks instead of regular branches the investment in these kiosks carry cost and that requires earning. The returns from the overnight money market will not be sufficient for that.

4. Many of these banks will collapse and then there will be a lobbying to allow them to lend with a cap. It is just coming. Just wait and see. They will start allowing these banks to lend against gold first and then extend it to FDs and Government Securities (with sovereign Guarantee) to start with as the argument will be that the load of NPAs will not be there for these banks.

5. Instead of these new banks, the RBI could have allowed the existing banks, both private and public sector, to open kiosks in villages through the route of a subsidiary to increase coverage as well as to improve electronic banking,

I have doubts about the usefulness of these new pigmies. Someone has allowed himself to be led by nose. The Savings Banks of US and Europe are being copied here in a least efficient way. LOL.