Skip to main content

RBI stresses on shared infrastructure for payments banks

By
The Reserve Bank of India (RBI) has suggested payments banks that have been granted the in- principle licence to ensure there is sharing of infrastructure among banks. The regulator believes this will help achieve the spirit of financial inclusion more efficiently. “The idea by the banking regulator is that there should be sharing of resources and functional interoperability which will also allow us to keep the costs under check,” said one of the applicants, who had attended the meeting last week.
For payments banks keeping acheck on the cost will be an important concern. As part of the mandate, these banks need to reach the unbanked area where infrastructure sharing will become a key to ensure cost efficiency, say analysts.
Shinjini Kumar, leader (banking and capital markets) at PwC India, explains this sharing of infrastructure will lead to more efficiency in the system. “ New banks will be required to fulfil the expectation of payment access points within 15 minutes of walking distance. This will necessitate better automated teller machine ( ATM) infrastructure.
Common infrastructure such as white label ATMs (WLAs), micro ATMs and cash recyclers may be desirable to achieve this goal, driving the creation of common infrastructure and collaboration,” Kumar said in a report.
The sharing of infrastructure has already begun with certain payments and small finance banks looking at tying up with WLA players. The cost structure works out for the niche banks with the cost of setting up an ATM being Rs.3- 5 lakh while the cost of maintaining it is Rs.25,000- 40,000 a month. However, if the bank opts for a tie- up with the WLA operator, then they only have to pay the interchange fee ( the amount a bank has to pay a white- label ATM operator if its customer makes a transaction on the latter’s ATM). Recently, out of the 42 applicants for payments bank licence, RBI granted in- principle licence to 11 applicants.
Payments banks can accept deposits of up to Rs.1 lakh and offer current and savings account deposits. They can also issue debit cards and offer internet banking. But they are not allowed to lend or issue credit cards.
On the other hand, payments have asked RBI for further flexibility in the investment regime. According to the current rules, payments banks need to invest 75 per cent of the demand deposit balances in government securities and treasury bills with maturity up to one year.
Business Standard, New Delhi, 21st Oct. 2015

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more