Independent Research and Policy Advocacy

Tracking Performance of Payments Banks against Financial Inclusion Goals

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The CCFS Report lays out a framework to understand various types of current and potential banking system designs. The framework consists of two broad designs: Horizontally Differentiated Banking Design System (HDBS) and Vertically Differentiated Banking Design System (VDBS), which are constructed from the functional building blocks of payments, deposits and credit. In an HDBS design, the basic design element remains a full-service bank that combines all three building blocks of payments, deposits, and credit but is differentiated primarily on the dimensions of size or geography or sectoral focus. In a VDBS design, the fullservice bank is replaced by banks that specialise in one or more of the building blocks of payments, deposits, and credit.

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