With the setting up of 11 new payments banks in the country, an incremental amount of at least Rs 14 lakh crore per annum may be freed up for funding the infrastructure sector, an internal study by the State Bank of India (SBI) said.
The report said that at present people hold a significant amount of cash with them for their day-to-day transactions. “It is expected that the payment banks will accelerate India’s journey to a cashless economy. In a simple arithmetic, even if the cash with public gets reduced by 1%, this will increase the deposit base of banks by around Rs 15 lakh crore,” the report revealed.The payments banks would not offer full banking services and confine its operations to acceptance of deposits, remittance services and other specified services. They have also been allowed to hold a maximum deposits of Rs 1 lakh per customer in the initial phase.
At present, the outstanding deposit of small banks in India is about Rs 1 lakh crore. The report said that if each payments bank mobilises one fourth of such deposits in a year, with an assumption of a penetration rate of 25% and given that the Jan Dhan Yojana mobilisation is around Rs 20,000 crore in a year, 11 payment banks would thus mobilise around Rs 2.75 lakh crore.
“Given that payments banks can only invest in government securities, this entire amount will thus be freed up for credit needs towards the infrastructure sector,” Soumya Kanti Ghosh, chief economic adviser, SBI told HT.
Ghosh also said that the payments bank model will primarily run on digital mode and given that the credit profile and transaction history of customers will be easy to build, there is a huge opportunity for banks to unlock retail business potential.