Another Payments bank license surrendered: Tele...

Another Payments bank license surrendered: Telenor, IDFC Bank and Sun Pharma promoter consortium quits

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Score: 3 Votes: 3
A2z1
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Another Payments bank license surrendered: Telenor, IDFC Bank and Sun Pharma promoter consortium quits

https://cdn0.desidime.com/attachments/photos/285255/medium/3372275piggy-bank.jpg?1480972309

Sun Pharma promoter Dilip Shangvi who had partnered with IDFC Bank and telecom operator Telenor to start a Payments Bank, has surrendered his license, reports Mint. Shangvi had received an in-principle approval from the Reserve Bank of India (RBI) in August 2015. In a joint statement, the three partners said that they would be communicating their decision to the RBI and not pursue a payments bank. It however did not specify a reason for why it would not commence payments bank operations.

Not the first to quit

RBI had permitted 11 entities to start a payments bank, with this development the list is down to nine.

In March this year, Cholamandalam Investment and Finance Company had decided to abandon its plans to set up a payments bank, saying that the decision came from the board after “considering competition and other factors, including the long gestation period”.

Issues with the Payments Bank license

Payments banks cannot undertake any lending operations. However, they can offer other non-risk sharing simple financial services activities, not requiring any commitment of their own funds, such as distribution of mutual fund units, insurance products, pension products, etc.

https://cdn0.desidime.com/attachments/photos/285262/medium/3372275payments-bank.jpg?1480972312

They will also have to invest minimum 75% of its “demand deposit balances” in Government securities or Treasury Bills with maturity up to one year and hold maximum 25% in current and time / fixed deposits with other scheduled commercial banks for operational purposes and liquidity management. They will also be required to maintain a Cash Reserve Ratio (CRR) with RBI on its outside demand and time liabilities.

Commencement of operations by other players

So far, three players have announced the date by when they would be starting their payment bank operations. Information and communications minister Ravi Shankar Prasad announced that India Post would be beginning its operations from March 2017, as indicated by this PTI report. Paytm has set a target of August 2016 to commence operations while Airtel will be starting its payments bank operations by the second quarter of this financial year.

Developments in the space

– In February, alternate banking channel company FINO PayTech signed an agreement with Reliance Commercial finance to offer credit to rural poor in the states of Maharashtra and Madhya Pradesh. RBI’s guidelines explicitly state that a payments bank cannot undertake lending activities. As such, FINO will only be providing disbursement services for Reliance Commercial Finance and not actually provide the loan themselves.

– In January, the Department of Posts said it would be setting up 1,000 ATMs and install a core banking solution at 25,000 post offices by March 2016.

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Deal Colonel
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Tough fight by POST BANK

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Post office bank? how would their service be?

Stupendous man
Deal Captain
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Soon ‘Paytm baba’ will follow the suit. https://cdn2.desidime.com/assets/textile-editor/icon_smile.gif

A2z1
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@thrifty_indian wrote:

Soon ‘Paytm baba’ will follow the suit. https://cdn2.desidime.com/assets/textile-editor/icon_smile.gif

Tata did not let loose till it took over Corus
This Sharmaji is also adamant like mannu Sharma of tanu Weds Manu & will definitely succeed.
I am positive.

Paytm Alibaba Jo hai….

Stupendous man
Deal Captain
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@A2Zdeals wrote:

@thrifty_indian wrote:

Soon ‘Paytm baba’ will follow the suit. https://cdn2.desidime.com/assets/textile-editor/icon_smile.gif

Tata did not let loose till it took over Corus
This Sharmaji is also adamant like mannu Sharma of tanu Weds Manu & will definitely succeed.
I am positive.

Paytm Alibaba Jo hai….


Might happen, he has pretty hefty backers. Let’s wait and watch.

Translation: Paytm baba ke papa ke paas bahut paisa hai.

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Deal Captain
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@thrifty_indian wrote:

@A2Zdeals wrote:

@thrifty_indian wrote:

Soon ‘Paytm baba’ will follow the suit. https://cdn2.desidime.com/assets/textile-editor/icon_smile.gif

Tata did not let loose till it took over Corus
This Sharmaji is also adamant like mannu Sharma of tanu Weds Manu & will definitely succeed.
I am positive.

Paytm Alibaba Jo hai….


Might happen, he has pretty hefty backers. Let’s wait and watch.

Translation: Paytm baba ke papa ke paas bahut paisa hai.


Hope they give a little bit. https://cdn2.desidime.com/assets/textile-editor/icon_toungueout.gif

Dp
Deal Subedar
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now tech mahindra surrenders the license https://cdn2.desidime.com/assets/textile-editor/icon_rolleyes.gif

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Deal Captain
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@ashu45 wrote:

now tech mahindra surrenders the license https://cdn2.desidime.com/assets/textile-editor/icon_rolleyes.gif


Thats sad. RBI might put some hefty fine on these companies.
Now the situation has become panicky for the rest.

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@BUTTERFLYBOY wrote:


@ashu45 wrote:

now tech mahindra surrenders the license https://cdn2.desidime.com/assets/textile-editor/icon_rolleyes.gif


Thats sad. RBI might put some hefty fine on these companies.
Now the situation has become panicky for the rest.

when asked-will RBI levy processong charges against those dropping out,mr mundra said current regulation doesnt give any scope of charging processing fee
http://profit.ndtv.com/news/corporates/article-...

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@hese wrote:

Post office bank? how would their service be?


Post office already offers Banking services by way of Saving bank, NSS, KVP etc and e-money orders. They also already offer insurance services by way of Postal Life Insurance. The reach of postal department only can be described by “To boldly go where no man has gone before”

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Deal Colonel
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@panchabhut wrote:

@hese wrote:

Post office bank? how would their service be?


Post office already offers Banking services by way of Saving bank, NSS, KVP etc and e-money orders. They also already offer insurance services by way of Postal Life Insurance. The reach of postal department only can be described by “To boldly go where no man has gone before”


= baba dar lagta hai.

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Deal Subedar
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@hese wrote:

Post office bank? how would their service be?


Your transaction is delayed, please call back after sometime when our Postmaster comes back from his other daughter’s wedding https://cdn2.desidime.com/assets/textile-editor/icon_toungueout.gif

A2z1
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@$hubham wrote:


@hese wrote:

Post office bank? how would their service be?


Your transaction is delayed, please call back after sometime when out Postmaster comes back from his other daughter’s wedding https://cdn2.desidime.com/assets/textile-editor/icon_toungueout.gif

What do you mean by other daughter 👿

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@A2Zdeals wrote:

@$hubham wrote:


@hese wrote:

Post office bank? how would their service be?


Your transaction is delayed, please call back after sometime when out Postmaster comes back from his other daughter’s wedding https://cdn2.desidime.com/assets/textile-editor/icon_toungueout.gif

What do you mean by other daughter 👿

Shabdo pe na jao, bhavna ko samjho bandhu https://cdn2.desidime.com/assets/textile-editor/icon_wink.gif

A2z1
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@$hubham wrote:


@A2Zdeals wrote:

@$hubham wrote:


@hese wrote:

Post office bank? how would their service be?


Your transaction is delayed, please call back after sometime when out Postmaster comes back from his other daughter’s wedding https://cdn2.desidime.com/assets/textile-editor/icon_toungueout.gif

What do you mean by other daughter 👿

Shabdo pe na jao, bhavna ko samjho bandhu https://cdn2.desidime.com/assets/textile-editor/icon_wink.gif
@[email protected]_0_0_D
@panchabhut

I don’t know about today’s Internet generation but I know postcard era… These guys are the ones who served us for years… Without telephone, without any mode of communication these postmen were there for us.
Now we see them on holi diwali asking for bakshis only. So much of competition with private couriers, Internet, Mobile etc

Obviously service standard should be bettered but let’s give them credit for what they did for years

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@A2Zdeals wrote:

I don’t know about today’s Internet generation but I know postcard era… These guys are the ones who served us for years… Without telephone, without any mode of communication these postmen were there for us.
Now we see them on holi diwali asking for bakshis only. So much of competition with private couriers, Internet, Mobile etc

Obviously service standard should be bettered but let’s give them credit for what they did for years


Of course but as many other govt arms they sat on their arse for too long! Also a lot many of govt employees are getting more & more service benefit these days, unlike those who retired in the 1970-2K era like my grandfather.

The thing is if they do their job better many of us wouldn’t have to chastise them, but when they don’t (& often they do not) then they are no better than Gati or ATS who we love to quibble about. The point is given the scarcity of funds some years back it could be argued that the quality of service was what we paid for, like during my grandfather’s era, but today when they are being paid a lot better their job output hasn’t increased much & that is something unacceptable IMO. This is about all govt employees & not just some of them.

A2z1
Deal Major
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@$hubham wrote:


@A2Zdeals wrote:

I don’t know about today’s Internet generation but I know postcard era… These guys are the ones who served us for years… Without telephone, without any mode of communication these postmen were there for us.
Now we see them on holi diwali asking for bakshis only. So much of competition with private couriers, Internet, Mobile etc

Obviously service standard should be bettered but let’s give them credit for what they did for years


Of course but as many other govt arms they sat on their arse for too long! Also a lot many of govt employees are getting more & more service benefit these days, unlike those who retired in the 1970-2K era like my grandfather.

The thing is if they do their job better many of us wouldn’t have to chastise them, but when they don’t (& often they do not) then they are no better than Gati or ATS who we love to quibble about. The point is given the scarcity of funds some years back it could be argued that the quality of service was what we paid for, like during my grandfather’s era, but today when they are being paid a lot better their job output hasn’t increased much & that is something unacceptable IMO.

+1

Governmental or being in power attitude doesn’t go easily

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@A2Zdeals Went through the article only cursorily. So does this mean that the IDFC zero balance savings account with the Visa Signature card is not an option anymore?

Ref: http://www.desidime.com/forums/dost-and-dimes/t... CC @disclaimer @Tejaa

A2z1
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@DealSeeker wrote:

@A2Zdeals Went through the article only cursorily. So does this mean that the IDFC zero balance savings account with the Visa Signature card is not an option anymore?

Ref: http://www.desidime.com/forums/dost-and-dimes/t... CC @disclaimer @Tejaa

That is part of their new bank initiative & customer acquiring strategy

That’s their product offering as full fledged bank

Matrix stickmen
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@A2Zdeals wrote:

@DealSeeker wrote:

@A2Zdeals Went through the article only cursorily. So does this mean that the IDFC zero balance savings account with the Visa Signature card is not an option anymore?

Ref: http://www.desidime.com/forums/dost-and-dimes/t... CC @disclaimer @Tejaa

That is part of their new bank initiative & customer acquiring strategy

That’s their product offering as full fledged bank


I see. So no impact on that account. Cool.

BTW, you seem to be working in the banking industry (?). If yes, can you explain or point me to the differences between a payments bank license and a regular bank license?

A2z1
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@DealSeeker wrote:

@A2Zdeals wrote:

@DealSeeker wrote:

@A2Zdeals Went through the article only cursorily. So does this mean that the IDFC zero balance savings account with the Visa Signature card is not an option anymore?

Ref: http://www.desidime.com/forums/dost-and-dimes/t... CC @disclaimer @Tejaa

That is part of their new bank initiative & customer acquiring strategy

That’s their product offering as full fledged bank


I see. So no impact on that account. Cool.

BTW, you seem to be working in the banking industry (?). If yes, can you explain or point me to the differences between a payments bank license and a regular bank license?


Universal banks vs Payment Banks vs Small Finance Banks

RBI / Rajan has taken steps to the micro level
Payment bank is basically upgrade of mobile wallets by using payments & technology in bigger form
Universal Banks work on interest margin. They are like full service flight carriers.
Payment bank in that sense low cost alternative.
This will raise the reach of banking to unbanked areas, rural areas.

Payment banks will be Combination of branches and digital platforms
Impact on universal banks : Minimal becuase they already have strong technology
Universal banks like kotak, icici, sbi, yes already have tie-up with this 8 (earlier 11) wanna be banks
These will definitely impact RBI new initiative small and medium banks

Major thread is from India Post with 139,000 post offices which exceeds bank branches at around 44,700 in rural areas

So in bullet points :
1) Payments banks will cater to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users.
2) Payments banks can take deposits. Deposits up to only Rs 1 lakh per person are allowed currently. They can issue ATM or debit cards.
3) Payments banks cannot give loans or issue credit cards.
4) Customers who do not have the means to maintain minimum balance will be welcomed into payments banks as revenue will be earned through transaction charges and not on the spread of interest between deposits and loans.
5) Payments banks can sell financial products like mutual fund units and insurance policies.
6) Money collected from depositors can be invested either in government bonds or can be deposited with other commercial banks.
7) Payments banks will allow last mile connectivity; they will make banking available in remote areas that are not serviced by bank branches currently. For this, payments banks are expected to piggy-back on their existing retail or other networks.
8) The operations of the payments banks will be fully networked and technology driven from the beginning.
9) The payments banks will also have a high-powered customer care cell to handle customer complaints.
10) The minimum paid-up equity capital for payments banks is Rs 100 crore. This means owners of payments banks have to put in a minimum of Rs 100 crore in return for equity in the company.

In Original post you will find one image showcasing what they can do what they don’t

It will be difficult to sustain. Like insurance companies they also would need ground level reach.

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Deal Cadet
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I think NSDL will emerge as the dark horse…

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