Mumbai: RBI Governor Raghuram Rajan cleared his stand on the payment banks on Thursday, calling them “one of the most exciting space for the banking system”.
According to Rajan, the financial services segment was seeing a tremendous amount of churn and competition.
He said that the RBI may issue licences for small banks from September onwards.
In conversation with State Bank of India’s Chairman Arundhati Bhattacharya, he attempted to debunk worries held by universal banks with regard to payment banks.
He exclaimed that universal banks have no threat from payment banks, adding that universal banks can do everything payment banks can. Rather, payment banks will serve as feeders to universal banks.
As payment banks will mostly be set up in rural areas, in a bid to bring the unbanked into the banking hemisphere, Rajan said that payment banks will serve to reduce the cost of access to the banking system.
Meanwhile, RBI on Wednesday nod for 11 entities to set up non-lending payments banks as part of the financial inclusion drive.