Don’t write off payments banks
The withdrawal of three licencees should not be read as a doomsday omen for the idea and underlying rationale
With three of the 11 payments banks licencees dropping their plans to start the banks recently, the fundamental premise and economics of payments banks have been questioned. While these decisions are understandably based on sound specific reasoning, they should not be read as a doomsday omen for the idea and rationale of payments banks. It is too early to write off a well-intentioned idea that puts change and innovation before incumbency. Rather, these withdrawals should be seen as signalling the need for introspection and course-correction to adapt to the fast-changing, competitive landscape of India’s banking and payments sector.