Many experts believe the deadline of January 2016 is ambitious. Do you agree
The target is, in some ways, based on our perception of Aadhaar. The big task of opening a bank account is verifying the customer, documents and so on. This is already being done by Aadhaar. The bank need not repeat it. But if you believe Aadhaar will not get done by 2015, then we could talk about extension. We have consulted with the UIADAI and the process looks quite good and on track.
At a time when there is already a process to give out fresh licences, do you think it was prudent to give out these recommendations
The RBI has already put out an approach on differentiated licences, so it is not a new idea. We have a governor who is interested in moving fast. Please do not read too much into dates. We had been told, do not take too much time. We want fresh thinking, and that was his one-line mandate to us.
What is the timeframe for the new category of banks that you propose and what changes the RBI will have to bring about
There is not a lot of regulation change required; there is more of a decision needed. I cant say how much time it would take, I hope it would be soon. It is an internal process of the RBI. My sense is what we have put out is a minor extension of what they already have in place.
The kind of charges that banks have is prohibitive for customers. Do you think your vision of universal bank account be met
The opening of the account itself is a database entry, like opening and e-mail account. A lot of the work is checking the documents, for which the cost is already borne by Aadhaar. We are saying that banks should be left to charge. A customer is actually ready to spend. You just make the service available, market forces will figure the rest out.
Does the panel feel existing banks must become payment banks or new players must come in
Payments banks will not have priority sector mandates; they are on the liability side. We have asked full SLR and CRR mandates for them, whatever the current level is. Our thought process is that there are 27 PPIs operating almost as quasi-payment banks. It is a graduation path for them. If somebody wants to establish a new bank, they can surely approach the RBI for a licence and do so.
Can you explain the weightages that you have mentioned for priority sector credit
We have used a simple metric. We know the system-wide level of direct agriculture. The system is 25% short in direct agri, it is 10% in weaker sections. So, if you lend R1 to direct agri, it would be equivalent to R1.25%. We havent recommended a hike in priority sector lending. It remains at 40%, we have just changed weightages. A lot of priority sector is going to some states; it is not spreading to other places. The idea is to encourage banks to go in difficult areas and sectors.
There is already a report that put forth a change in the cooperative banking structure. Has your committee taken that into account
We had a lot of support from Nabard. Clearly, the committee has gone into the depth of the structure; we didnt have any new ideas to add. We acknowledge that the sector has got enormous strength. PACS are part of cooperative structure, they are not banks. These have enormous power on the lending side. There are 20-30% doing really well out of the 93,000 entities. We looked at global evidence of cooperative system. There are structural problems, not just governance issues. We need to fix the structure, not just keep granting regional bank licences.