Gates Foundation to Help India’s Payments Banks with Tech, Innovation
Wednesday, September 9, 2015
The Bill & Melinda Gates Foundation will help newly licensed payment banks in technology sharing and innovation as it expects India to become a global showcase for digital payment systems in the next three to five years, Daniel Radcliffe, senior officer at the financial services for the poor (FSP) programme at the foundation, said in an interview on Friday.
The Gates Foundation, which is the largest private philanthropic organization in the world, is not looking to take equity stakes in these new banks but is open to grant money for product and technology innovations to help reach financial services to the poor, Radcliffe said in a telephone interview.
“These banks have deep enough pockets for investing capital. I don’t think they will need money,” he said, adding that he expects to help these new banks in learning the lessons in payment systems around the world and accelerating innovations around payments.
Last month, the Reserve Bank of India (RBI) granted in-principle approvals to 11 entities to start a new category of banks, which will provide basic savings, deposit, payment and remittance services to people without access to the formal banking system. These banks will target financially excluded customers such as migrant workers, low-income households and tiny businesses. They will not be in the business of lending.
Radcliffe said the 11 companies selected are some of India’s biggest, with deep pockets and strong expertise in building distribution networks across India.
“The question mark is how many of these players translate their licences in making serious investments in rolling out payment services in India. The minimum threshold for applying for a licence is not that high and now the real test begins as Bharti Airtel Ltd, Reliance Industries Ltd, Idea Cellular Ltd, Tech Mahindra Ltd put down $30 million to $50 million in trying to roll out their services,” he said.