Financial Systems Design

Non-banking finance companies (NBFCs) represent an important linkage between the formal banking sector and informal segments of the real economy in India

RBI recently released the operating guidelines for the Small Finance banks and Payments Banks on October 6, 2016. To take stock of these, we have put together a brief comparison of the regulatory requirements of these banks against those for universal banks.

Banks in India, whether large or small, have traditionally been required to adopt similar strategies to expanding their banking businesses.

In this post we have put together an infograph below that highlights some of the aspects pertaining to credit bureau regulatory landscape in India, USA and Australia.

Payments banks are different from regular banks. They can only accept deposits up to Rs. 1 lakh per person, roughly $1500, and cannot grant loans. Furthermore, payments banks can only invest their money in safe government securities and other highly liquid assets. Their primary objective is to further financial inclusion by providing access to small savings, payments and remittance services to low-income customers without compromising financial stability.

Recently the Reserve Bank of India released a Consultation Paper on Peer to Peer Lending aimed at defining the contours of regulating Peer to Peer (P2P) Lending in India.

I had an opportunity to participate in the excellent conference organised by the Stanford Centre for International Development (SCID) on Indian Economic Policy as a discussant for a presentation by Dr. Rakesh Mohan.

The Indian government is promoting the Jan Dhan Yojana, Aadhaar and mobile banking – or the “JAM trinity” — as the pathway to financial inclusion. But are banks capable or even willing take on their role in this ambitious agenda? Based on a field study in Chennai, this column highlights the range of costs and constraints imposed by banks on customers attempting to enter the formal financial sector.

The Indian government is promoting the Jan Dhan Yojana, Aadhaar and mobile banking – or the “JAM trinity” — as the pathway to financial inclusion. But are banks capable or even willing take on their role in this ambitious agenda? Based on a field study in Chennai, this column highlights the range of costs and constraints imposed by banks on customers attempting to enter the formal financial sector.

85% of our workforce employed in the unorganised sector workforce who do not have access to any formal pensions, the Government of India (GoI) introduced the National Pension System-Swavalamban (NPS-S) in 2010. This scheme was implemented with of the objective of encouraging citizens engaged in the unorganised sector to save towards retirement.