The Reserve Bank of India has proposed
major reforms in banking sector with issue of draft guidelines for setting up “Small
and Payment Banks” which will cater to marginalized sections of the Society,
including migrant laborers, for collecting deposits and remitting funds.
These banks will provide a whole suite
of basic banking products such as deposits and supply of credit, but in a
limited area of operation. The payments banks will offer a limited range of
products such as acceptance of demand deposits and remittances of funds. They
will have a widespread network of access points particularly in remote areas,
either through their own branch network or through Business Correspondents
(BCs)/agents or through networks provided by others.
Ø
The
existing non-bank pre-payment instrument issuers, non-banking finance companies
(NBFCs), corporate BCs, mobile telephone companies, super-market chains,
companies, real sector cooperatives and public sector entities may apply to set
up a payments bank.
Ø
In
case of small banks, resident individuals with 10 years of experience in
banking and finance, companies and Societies will be eligible as promoters to
set up small banks. NBFCs, micro finance institutions (MFIs), and Local Area
Banks (LABs) can also opt for conversion into small banks.
Small
Banks-
Ø
The
objective for these Small Banks is to increase financial inclusion by provision
of savings vehicles to under-served and un served sections of the population,
supply of credit to small farmers, micro and small industries, and other unorganized
sector entities through high technology-low cost operations. Local focus and
the ability to serve smaller customers will be a key criterion in licensing
such banks
Ø
The area of operations would normally be
restricted to contiguous districts in a homogenous cluster of states of union
territories so that the Small Bank has a ‘local feel’ and culture. However, if
necessary, it would be allowed to expand its area of operations beyond
contiguous districts in one or more states with reasonable geographical
proximity.
Ø
In view of concentration of area of operations,
the Small Bank would need a diversified portfolio of loans, spread over it area
of operations.
Payment Banks-
Ø
Objective of payments banks is to increase
financial inclusion by providing small savings accounts, payment/remittance
services to migrant labour, low income households, small businesses, other
unorganised sector entities and other users by enabling high volume-low value
transactions in deposits and payments/remittance services in a secured
technology-driven environment.
Ø
Payments Banks can accept demand deposits (only
current account and savings accounts). They would initially be restricted to
holding a maximum balance of Rs 100,000 per customer. Based on performance, the
RBI could enhance this limit.
Ø
No credit lending is allowed for Payments Banks
Ø
The float funds can be parked only in less than
one year Government Securities
Brief Summary:
|
Particulars
|
Small
Banks
|
Payment
Banks
|
|
Eligible
Entity
|
NBFC,
MFI, Cos. Societies, resident individuals or professionals with 10 or more
years of experience
|
Pre-payment
issuers, NBFC, Corporates, telecom cos, super markets, real estate cos. &
co-operatives
|
|
Capital
|
INR
100 Crore
|
INR
100 Crore
|
|
Permitted
Activity
|
Collect
deposits and lend to farmers, small businesses and industries, unorganized
sector
|
Payment
& remittance services, demand deposit products to small biz & low
income households
|
|
Statutory
Compliance
|
Maintain
CRR, SLR & 15% capital adequacy as per Basel I norms
|
Maintain
CRR and investment money in Government sector
|
|
Promoter
Holding
|
It
should be lowered to below 40% in 3 years and 26% in 12 years
|
It
should be lowered to below 40% in 3 years and 26% in 12 years
|
|
FDI
|
As
per FDI policy
|
As
per FDI policy
|
For further details, please contact at
admin@equicorplegal.com/ +91
9958709189
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