RBI gives 'in-principle' approval to 11 applicants for Payment Banks
Updated: Aug 20, 2015 11:26:44am
Mumbai, Aug 20 (KNN) The Reserve Bank of India has decided to grant “in-principle” approval to the following 11 applicants to set up payments banks.
The approvals have been given to Aditya Birla Nuvo Limited; Airtel M Commerce Services Limited; Cholamandalam Distribution Services Limited; Department of Posts; Fino PayTech Limited; National Securities Depository Limited; Reliance Industries Limited; Shri Dilip Shantilal Shanghvi; Shri Vijay Shekhar Sharma; Tech Mahindra Limited; and Vodafone m-pesa Limited.
On August 27, 2013, the Reserve Bank placed on its website, a policy discussion paper on Banking Structure in India – The Way Forward. One of the observations in the discussion paper was that there is a need for niche banking in India, and differentiated licensing could be a desirable step in this direction, particularly for infrastructure financing, wholesale banking and retail banking.
Subsequently, the Committee on Comprehensive Financial Services for Small Businesses and Low Income Households (Chairman: Dr. Nachiket Mor) in its report released in January 2014 examined the issues relevant to an ubiquitous payment network and universal access to savings and recommended the licensing of payment banks to offer financial services to the hitherto excluded segments of the population.
In the Union Budget 2014-2015 presented on July 10, 2014, Finance Minister Arun Jaitley announced that, “After making suitable changes to current framework, a structure will be put in place for continuous authorization of universal banks in the private sector in the current financial year. RBI will create a framework for licensing small banks and other differentiated banks. Differentiated banks serving niche interests, local area banks, payment banks etc. are contemplated to meet credit and remittance needs of small businesses, unorganized sector, low income households, farmers and migrant work force”.
Draft guidelines for licensing of payments banks were released for public comments on July 17, 2014. Based on the comments and suggestions received on the draft guidelines, final guidelines for licensing of payments banks were issued on November 27, 2014. The Reserve Bank also issued clarifications to the queries (numbering 144) on the guidelines on January 1, 2015. The Reserve Bank received 41 applications for payments banks.
The “in-principle” approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, the Reserve Bank would consider granting to them a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular licence is issued, the applicants cannot undertake any banking business. (KNN Bureau)
The approvals have been given to Aditya Birla Nuvo Limited; Airtel M Commerce Services Limited; Cholamandalam Distribution Services Limited; Department of Posts; Fino PayTech Limited; National Securities Depository Limited; Reliance Industries Limited; Shri Dilip Shantilal Shanghvi; Shri Vijay Shekhar Sharma; Tech Mahindra Limited; and Vodafone m-pesa Limited.
On August 27, 2013, the Reserve Bank placed on its website, a policy discussion paper on Banking Structure in India – The Way Forward. One of the observations in the discussion paper was that there is a need for niche banking in India, and differentiated licensing could be a desirable step in this direction, particularly for infrastructure financing, wholesale banking and retail banking.
Subsequently, the Committee on Comprehensive Financial Services for Small Businesses and Low Income Households (Chairman: Dr. Nachiket Mor) in its report released in January 2014 examined the issues relevant to an ubiquitous payment network and universal access to savings and recommended the licensing of payment banks to offer financial services to the hitherto excluded segments of the population.
In the Union Budget 2014-2015 presented on July 10, 2014, Finance Minister Arun Jaitley announced that, “After making suitable changes to current framework, a structure will be put in place for continuous authorization of universal banks in the private sector in the current financial year. RBI will create a framework for licensing small banks and other differentiated banks. Differentiated banks serving niche interests, local area banks, payment banks etc. are contemplated to meet credit and remittance needs of small businesses, unorganized sector, low income households, farmers and migrant work force”.
Draft guidelines for licensing of payments banks were released for public comments on July 17, 2014. Based on the comments and suggestions received on the draft guidelines, final guidelines for licensing of payments banks were issued on November 27, 2014. The Reserve Bank also issued clarifications to the queries (numbering 144) on the guidelines on January 1, 2015. The Reserve Bank received 41 applications for payments banks.
The “in-principle” approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, the Reserve Bank would consider granting to them a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular licence is issued, the applicants cannot undertake any banking business. (KNN Bureau)
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