Following members of the FIAKS community participated in the knowledge sharing e-panel discussion –
- Mr KVS Manian, President–Corporate and Investment Bank, Kotak Mahindra Bank
- Mr Dilip Asbe, Managing Director & CEO, National Payment Corporation of India
- Mr Sunil Kulkarni, Joint Managing Director, Oxigen Services (India) Pvt Ltd
- Mr Anuj Khosla, Country Head, Union Pay International
- Mr Vikram Kaushal, Managing Partner– Vardhan Ceqube India Investment fund
- Mr Piush Kothari, Business Head Digital, Customer Analytics and Strategy, Aditya Birla Idea Payment Bank
- Mr Roopesh Chandran, Director Business Development, Visa
- Dr R Bhaskaran, Former Chief Executive Officer, IIBF
- Mr Rahul Dayal, Senior Vice President & Head-Business Solutions Group Liabilities , cards & BI, RBL Bank
- Ms Aishwarya Jaishankar, Vice President , Kotak Mahindra Bank
- Mr Ajay Panicker, CEO & Founder, NetPay Limited
- Mr Hemal Shah, Technical Product Manager, Mastercard
- Mr Ishan Vaish, India Partnership Manager, Apple
- Mr Rana Sinha Ray, Head Technology, TimesofMoney
- Mr Anil Shenoy, Director and Risk Management, First Data Corporation
- Mr Narayan Rao, Chief Services Officer, Suryoday Small Finance Bank
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum
FIAKS community Question
Should payment banks be allowed to lend up to Rs. 1 Lakh or should the universal banks should be made to operate beyond 1 Lakh deposits (time & demand liabilities) to create level playing field/proper segmentations for payment banks?
FIAKS Community Discussions
This question resulted in sharp reactions in the FIAKS community. One of the community experts said, “No thank you”. The universal banks are not ready to accept any such lower threshold. Let the customer decide whom he will bank with, or choose for the use of a particular product. I am not a status quoits in most circumstances, but on this status quo is logical. The idea was to create narrower banks with specific purpose with transparent criteria and conditions laid down. Nobody was forced to be a bank of a particular type. You choose to be a particular type of a bank with conditions that come with it. They had the choice on tap to apply for a universal banking license. There is no question of limiting universal banks with any conditions. A universal banking license is a different class of license with full-service capability. As of now, universal banks do have an option of taking a stake in a payments bank within the 20% limit apart from doing payment bank business within the universal bank. I don’t see any debate here. Payment banks need to figure out their business model and economics carefully.
If payment banks are adding these customers at a cost, they must be seeing value in the medium/long term. It is their commercial decision. Why should they be regulatorily stopped? And why will other kinds of banks find it more profitable to acquire customers if these banks don’t? Are payment banks wanting “protectionist “ policies? I thought it was expected to be the other way around – payment banks were to threaten the sleepy universal banks out of their stupor, on payment products. Let that healthy competition play out as per the current regulatory framework.
The community expert said that RBI may permit payment banks to lend to a limited value like taking deposits in due course. I would believe that would be the right thing to do. Payment is closely linked to credit too.
Another member said the regulator is not able to increase the DICGC cover of Rs 1 Lakhs. Therefore, payment banks who are not allowed to credit business have been asked to accept deposit up to Rs. 1 lakh only. The universal banks are allowed to take deposit beyond this. Further, on account of this, they have to maintain a higher risk. Two things can be thought of –
- Increase deposit insurance to Rs. 2.5 lakhs and
- Interest rates on deposit above Rs. 2.5 lakhs could be risk-based.
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