What payments banks, Bandhan can do for financial inclusion in India
Wednesday, August 26, 2015
There have two big developments in financial inclusion in the country in the past few days, whose significance stands out despite the din arising from the recent global stock market crash. One was the central bank allowing 11 corporates to open "payments banks" and the other, the launch of the Bandhan Bank, a little over a year after RBI allowed the microfinance firm's entry into the banking sector.
The interesting aspect of payments banks is that they have no parallel. So, here is a banking experiment tailor-made for India, monitored by the RBI. The 11 corporates and individuals who have been given the licence to operate these banks, including Aditya Birla Nuvo, Fino PayTech, Reliance Industries, Dilip Shanghvi and Tech Mahindra, are expected to penetrate deeper into the hinterland with their services – which include raising deposits up to one lakh, enabling transfers and remittances through mobile services, automatic payment of bills, by issuing debit cards and ATM cards – in short, almost all services offered by commercial banks, except lending money or issuing credit cards.