August 20, 2015
Kalaivaraikalai
The Reserve Bank of India (RBI) has today decided to grant “in-principle” approval to 11 applicants to set up payments banks.
Aditya Birla Nuvo, Airtel M Commerce Services, Cholamandalam Distribution Services, Department of Posts (DoP), Fino PayTech, National Securities Depository, Reliance Industries, Dilip Shantilal Shanghvi, Vijay Shekhar Sharma, Tech Mahindra and Vodafone m-pesa were issued license under the Guidelines for Licensing of Payments Banks issued on November 27, 2014.
The process for selecting the applicants was based on detailed scrutiny by an External Advisory Committee (EAC) under the chairmanship of Dr Nachiket Mor, director, Central Board of the Reserve Bank of India. The recommendations of the EAC were an input to an Internal Screening Committee (ISC), consisting of the governor and the four deputy governors.
The ISC prepared a final list of recommendations for the Committee of the Central Board (CCB), after independently scrutinizing all the applications. On August 19, 2015, the CCB went through the applications and approved the announced list of applicants.
In arriving at the final list, the CCB noted that it would be difficult at this stage to forecast the most successful likely model in the emerging business of payments. The CCB further noted that payments banks cannot undertake lending, and therefore believed that the payments bank would not be subject to the same risks as a full service bank.
Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the guidelines and move to giving licences more regularly, that is, virtually “on tap”. The Reserve Bank believes that some of the entities who did not qualify in this round, could well be successful in future rounds.
The Reserve Bank received 41 applications for payments banks.
The “in-principle” approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfill the other conditions as may be stipulated by the Reserve Bank.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, the Reserve Bank would consider granting to them a license for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular license is issued, the applicants cannot undertake any banking business.
Aditya Birla Nuvo, Airtel M Commerce Services, Cholamandalam Distribution Services, Department of Posts (DoP), Fino PayTech, National Securities Depository, Reliance Industries, Dilip Shantilal Shanghvi, Vijay Shekhar Sharma, Tech Mahindra and Vodafone m-pesa were issued license under the Guidelines for Licensing of Payments Banks issued on November 27, 2014.
The process for selecting the applicants was based on detailed scrutiny by an External Advisory Committee (EAC) under the chairmanship of Dr Nachiket Mor, director, Central Board of the Reserve Bank of India. The recommendations of the EAC were an input to an Internal Screening Committee (ISC), consisting of the governor and the four deputy governors.
The ISC prepared a final list of recommendations for the Committee of the Central Board (CCB), after independently scrutinizing all the applications. On August 19, 2015, the CCB went through the applications and approved the announced list of applicants.
In arriving at the final list, the CCB noted that it would be difficult at this stage to forecast the most successful likely model in the emerging business of payments. The CCB further noted that payments banks cannot undertake lending, and therefore believed that the payments bank would not be subject to the same risks as a full service bank.
Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the guidelines and move to giving licences more regularly, that is, virtually “on tap”. The Reserve Bank believes that some of the entities who did not qualify in this round, could well be successful in future rounds.
The Reserve Bank received 41 applications for payments banks.
The “in-principle” approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfill the other conditions as may be stipulated by the Reserve Bank.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, the Reserve Bank would consider granting to them a license for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular license is issued, the applicants cannot undertake any banking business.
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