How Do India’s Payments Banks Measure Against Key Principles for Financial Inclusion?
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.
Payments Banks become a reality
The RBI has published final Guidelines for Licensing of Payments Banks in India after reviewing feedback and comments obtained by it on the draft guidelines that were published in July 2014 and covered in an earlier post.
Niche banking in India: Draft Guidelines for Payments Banks
The Committee on Comprehensive Financial Services for Small Businesses and Low Income Households recommended developing a vertically differentiated banking structure, in which banks specialise in one or more of three functions- payments, credit delivery and retail deposit taking.
NBFCs can now sign up to become Business Correspondents
Removing an earlier restriction that the Reserve Bank had placed on NBFCs, the RBI today has restored the permission for non-deposit taking NBFCs (NBFC-ND) to become Business Correspondents (BCs) to commercial banks, as recommended by the Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (CCFS).
The Mor Committee Report – Will Payments Banks Be Revolutionary or Evolutionary?
One of the more debated aspects of the Mor Committee’s report on “Comprehensive Financial Services for Small Businesses and Low Income Households” is the proposal for the new class of banks, in particular the “Payments Banks”.
Video: Dr. Nachiket Mor on the Report of the RBI Committee on Comprehensive Financial Services
In the below video Dr. Nachiket Mor articulates the RBI committee’s vision for financial inclusion and financial deepening in India covering aspects of Universal Electronic Bank Account, Payments, Credit, Priority Sector Lending and Customer Protection.
On the ‘Implementability’ of the Recommendations of the RBI Committee on Comprehensive Financial Services
Since its release on January 7, it has been heartening to see the amount of debate and interest generated by the Report of the Committee on Comprehensive Financial Services, chaired by Dr. Nachiket Mor.
RBI Releases Report of the Nachiket Mor Committee on Comprehensive Financial Services
The Committee on Comprehensive Financial Services for Small Businesses and Low Income Households, set up by the RBI in September 2013, was mandated with the task of framing a clear and detailed vision for financial inclusion and financial deepening in India.
A summary of NBFC-MFI Directions – August 2012
On August 03, 2012, RBI came out with its ‘Non Banking Financial Company-Micro Finance Institutions’ (NBFC-MFIs) – Directions – Modifications’1 via which RBI has made changes to Directions issued on December 02, 2011 in light of representations received by it from NBFCs functioning in the microfinance sector.
Perspective on IRDA’s proposed ‘everything product’
The Micro-insurance sector has been often in the news in the recent times. This is primarily because of IRDA’s recent recommendation towards an “everything product” approach for which the Life Insurance Council has been asked to prepare a blue-print.
