In Kenya, over two-thirds of the population currently uses M-Pesa, a payment bank launched by mobile phone operator Safaricom and about 25 per cent of the Kenyan GDP (Gross Domestic Product) flows through it. A number of other products have started to be offered through the M-Pesa platform, including bank deposits, loans, pre-paid electricity vouchers. You can even pay for a taxi ride through the platform — a function which may not be possible even in the US.
Will India also witness such a system? There is enough scope as half of our population is yet to get even basic banking services. The NDA government is getting ready for an ambitious action plan envisaging two bank accounts for every household in two phases which will lead to the opening of 12 crore accounts in rural areas and 3 crore in urban areas. The proposed payment banks and small banks are set to play a major role in this gargantuan exercise.
The Reserve Bank of India’s draft guidelines for payments and small banks — or “differentiated” banks — have created considerable buzz across the sector as the RBI wants to open doors to mobile phone companies, super-market chains, companies, real sector cooperatives, public sector entities, non-bank pre-paid instrument issuers (PPIs), non-banking finance companies (NBFCs) and microfinance institutions and local area banks to set up such banks.
Rishi Gupta, COO & ED, Fino PayTech said, “The RBI’s draft payment bank guidelines are a welcome step in the journey of financial inclusion. Payments bank will help de-clutter commercial banks from financial inclusion activities and bring in more focussed approach in serving the rural masses.”
While the final guidelines are expected to be out in the next two months, hundreds of aspirants are getting ready to approach the RBI for a licence. “We believe this is an interesting phase in the Indian banking industry and we look forward to be a part of this eco-system. We will need to further analyse the guidelines and subsequent business models, before taking any call,” Gupta said.
“The opening up of the eligibility criteria is welcome so as to have a larger number of applicants meeting with the ‘fit and proper’ criteria as defined in SEBI regulation 2009. It is hoped that the threshold of capital requirement of Rs 100 crore and further requirement of maintaining operational guidelines such as maintaining capital adequacy ratios and leverage ratio of not less than 5 per