PPIs can become payments banks: Nachiket Mor

Prepaid payment issuers can be converted into payments banks, NBFCs can be turned into wholesale banks, says Nachiket Mor

Dinesh Unnikrishnan
First Published10 Jan 2014
The process of giving entry to such banks should be decided by RBI, Mor said. Photo: Pradeep Gaur/ Mint<br />
The process of giving entry to such banks should be decided by RBI, Mor said. Photo: Pradeep Gaur/ Mint

Mumbai: The proposed payments banks, a new set of lenders suggested by a Reserve Bank of India (RBI) committee this week to widen the spread of financial services, can be created by converting prepaid payment issuers (PPIs), Nachiket Mor, chairman of the panel, said on Friday.

India has 27 PPIs. These companies provide cards that customers can use to make payments with the money that’s stored in them.

“This will be a gradual conversion for them,”said Mor, who is a member of RBI’s central board and a former ICICI Bank Ltd executive.

Even other entities that are interested in the business can set up the payments banks, Mor said. Such banks can convert themselves into full-service banks over a period of time, he said.

Similarly, the proposed wholesale banks can come up through the conversion of non-banking finance companies, Mor said.

The process of giving entry to such banks should be decided by RBI, Mor said.

“RBI will have to decide the process. We have not said either way but we would welcome a smooth conversion process,” Mor said.

Early this week, the panel headed by Mor submitted a report on improving the financial inclusion process through the creation of dedicated banks and universal electronic bank account numbers for every citizen by January 2016.

Such banks will have a minimum entry capital requirement of 50 crore, one-tenth of what a full-service bank requires, since they will have a near-zero risk of default, the panel said.

The Mor panel recommendations for dedicated banks for financial inclusion has come at a time when the central bank is in the process of giving entry to a third set of private banks in India’s 81 trillion banking sector.

An expert panel under former RBI governor Bimal Jalan is currently evaluating the credentials of 25 aspirants, including the Aditya Birla Group, the Bajaj Group and Anil Ambani’s Reliance Group.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeindustryPPIs can become payments banks: Nachiket Mor

Most Active Stocks

Ashok Leyland

210.55
10:29 AM | 24 MAY 2024
-1.85 (-0.87%)

Bharat Electronics

297.10
10:28 AM | 24 MAY 2024
8.7 (3.02%)

GAIL India

204.40
10:29 AM | 24 MAY 2024
3.95 (1.97%)

Tata Steel

174.80
10:29 AM | 24 MAY 2024
-0.65 (-0.37%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Inox Wind

164.20
10:21 AM | 24 MAY 2024
13.25 (8.78%)

BHARAT DYNAMICS ORD

1,527.50
10:22 AM | 24 MAY 2024
120.8 (8.59%)

Amara Raja Energy & Mobility

1,209.10
10:17 AM | 24 MAY 2024
94.85 (8.51%)

Vodafone Idea

15.11
10:29 AM | 24 MAY 2024
1.06 (7.54%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,252.000.00
    Chennai
    74,333.000.00
    Delhi
    73,685.000.00
    Kolkata
    73,901.000.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    99.84/L0.00
    Chennai
    100.75/L0.00
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumFor youGet App