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Growing gainfully The paradox: clamour for the Goliath and David Financial inclusion vs unclaimed deposits Merger mania haunts banks Who is the real beneficiary? Too big to fail and too small to sail Capital base of regional rural banks raised Indian customers are tech savvy Mega merger is on Why priority status? Governance in Reverse Gear? Fund healthcare clinics in villages... One down in private sector Why any time money? Big bank merger, bigger expectations Stage set for Indian ‘avatar’ of foreign banks The collaboration suite of cyber criminals Well-lived... Ernakulam excels... Payment banks have arrived Cradle of banks to a smart city... LVB- A supermarket of financial services Targets continue to be ad hoc Cut in repo rate – lower than expected Small finance payment banks... Ferrying digital banking to Lakshadweep Two banks: their jubilees and performances Growing volume of stressed assets… All that glitters is not gold... Greet Lakshmi the banking robot Small finance banks offer high interest rates Another route for achieving financial inclusion From lazy banking to easy banking Perhaps small is more beautiful than big! Just 660 days! Target over-ambitious... It’s a war on black money, support it. Grows Bigger How ‘secure’ are the secured loans? New capitals of Migrant banks How okay are new banks? Good, bad and ugly Small is ‘more’ beautiful Rationalised Bank deposits account for 46.3 per cent of household savings Drop in SLR- sparing lendable resources Cautious and considerate Reaching the Unreached… Thirty more cities seek to become SMART Managing NPAs... Aadhaar, niraadhaar and banking A development bank for BRICS Reaching out: is it slowing down? What is the priority – mergers or NPA reduction? Smart banking in smart cities Hesitancy in announcing year-end results Monetary policy continues to adopt dis-inflationary path A new development bank rising in the east… United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Nothing much can happen…. Banking on Risk Drastic decline in asset quality Holy or unholy? Needed a Banking Atlas Bottomlines shrink, bad loans rise... New bank licences, at last... Insatiable appetite for credit Banking in Telangana Emerging crisis A bank for women, by women Anytime banking to anywhere banking Banking overhauling or reorganisation? Lacklustre credit expansion
 
Small finance payment banks...

RBI has COME out with guidelines for issuing licences for small finance banks as well as for payment banks.

The objectives of the small finance banks are: “primarily to undertake basic banking activities of acceptance of deposits and lending to un-served and under-served sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.”

The initial paid up capital is Rs.100 crore with promoter’s minimum initial contribution fixed at 40 per cent.  These banks can open branches anywhere. They would be subjected to all prudential norms and regulations of RBI as applicable to existing commercial banks, including SLR and CRR requirements.  They are required to extend 75 per cent of their net bank credit to the sectors eligible for priority sector lending. They are also to ensure that at least 50 per cent of their loan portfolios constitute loans and advances of less than Rs. 25 lakh per account.

The other set of small banks proposed is the “payment banks.” Their objectives would be to further increase financial inclusion by providing small savings accounts and facilitating payment and remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users.

The list of eligible applicants is wide: existing non-bank pre-paid payment instrument-issuers and other entities such as individuals and professionals, NBFCs, mobile telephone companies, super-market chains, companies and real sector cooperatives, that are owned and controlled by residents. Public sector entities may apply to set up payments banks. They can mobilise small deposits up to Rs. 100,000 and adhere to the statutory requirements, but cannot lend.

Considering the inherent diversities of the Indian economy, more small banks are certainly necessary. However, working under the stringent stipulated conditions the viability of these banks may be under duress for long. The small gramin banks, which have been made bigger recently by merging 196 of them into 57, would now have a competitor in the small finance banks, to share their business.

 

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