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Companies also upbeat, say finance services will be key to success
MUMBAI: Building new markets and cross-selling of banking products will be key to the success of payments banks, companies shortlisted for such licences said.
MUMBAI: Building new markets and cross-selling of banking products will be key to the success of payments banks, companies shortlisted for such licences said.
The banks would work particularly well for entities with good customer reach and a base of operations such as cellphone companies.
Airtel M Commerce Services (a tie-up between Airtel and Kotak Bank), Department of Posts, Reliance Industries (in partnership with SBI), Paytm founder Vijay Shekhar Sharma, Vodafone m-pesa, National Securities Depository Ltd (NSDL), Aditya Birla Nuvo and Fino PayTech are gearing up to set up payments banks.
But at a time when bad loans are bleeding banks’ balance sheets, what is it that is keeping these entities hopeful?
“We have set an year-end target for the launch, focussing on technology implementation and product development,” said GV Nageswara Rao, MD, NSDL.
NSDL, India’s largest depository, handles securities held and settled in dematerialised form for investors and brokers.
Vodafone and Airtel are India’s largest telecom operators, with customer base of over 194 million and 200 million, respectively.
Last week, India Post received the go-ahead to set up a payments bank with a corpus of Rs 800 crore. Capitalising on its network of 154,000 post offices, all 650 branches of postal payments bank will be operational by September 2017.
Vijay Shekhar Sharma, co-founder of mobile wallet arm Paytm, will build on growing financial services to customers, and is in talks with non-banking finance companies and mutual funds.
Payments banks can also act as business correspondents (BCs) — the middleman between banks and customers situated at distant locations.
“We have tied up with 15 banks and have a total customer base of 100 million. With direct benefit transfer routed through bank accounts and being used via the Aadhaar or e-know your client (KYC) norms platform and e-wallets space, we believe the ecosystem is perfect for us to grow,” said Rishi Gupta, MD and CEO, FINO Paytech, India’s largest BC.
