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The RBI-appointed committee on financial inclusion has recommended that the central bank should set up specialised banks called Payments Bank to provide payment services and deposit products to small businesses and low-income households.
The committee, headed by Nachiket Mor, said that since the new bank will be dealing with poor customers, such a bank must be allowed to accept a maximum deposit of not more than Rs 50,000.
Such a bank will earn from the payment services it offers, such as money transfers and online payments, as well as by deploying the deposits in secure government securities (G-secs).
In order to protect the money of the poor customer, such a bank will not be allowed to lend in the market.
“(The bank) will not be permitted to assume any kind of credit risks,” the report said.
The bank will have to set aside a slice (the same as any other bank) of its total deposit with the RBI in the form of cash reserve ratio.
Also, the bank will be required to deposit the balance money in approved G-Secs within a period of three months, the report said.
The report pointed out that since such a bank will have a near-zero risk of default, it must be allowed to be set up with a minimum capital of Rs 50 crore against the regular norm of Rs 500 crore.
The report also said that existing banks should be permitted to create a Payments Bank as a subsidiary.
>satyanarayan.iyer@thehindu.co.in
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