Applicants are also pushing for some flexibility in investing part of their deposit in money market instruments so that they can have a better yield with liquidity. However, the RBI is worried that granting payments banks permission to invest in high-yield instruments could trigger a rate war between them and commercial banks.
Meanwhile, the applicants are looking at coming together and forming an association so that the industry can come up with common standards and there is some sharing of resources at the last mile for cost reduction. The central bank is supportive of shared infrastructure and wants interoperability among the payments banks so that there is enough efficiency in the system. In Thursday's meeting, the applicants said that there are several rural areas in India where rich farmers are forced to hold their wealth in cash because the nearest bank is a long distance away. In many cases, there are government officers on deputation to remote areas who have the income but no access to banking services, they said.
Although it is two months since the RBI granted in-principle approval to payments banks, many of them have not made much headway. The ones who have been granted a licence are Aditya Birla Nuvo, Airtel M Commerce, Cholamandalam Distribution Services, Department of Posts, Fino PayTech, National Securities Depository, Reliance Industries, Dilip Shantilal Shanghvi, Vijay Shekhar Sharma, Tech Mahindra and Vodafone m-pesa.
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