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Business News/ Industry / Banking/  Push only RuPay card: FM to banks

MUMBAI: Finance minister Nirmala Sitharaman on Tuesday said banks need to promote only RuPay cards, and believes that with the card network becoming global, it is not necessary for Indian customers to be offered other cards.

This, if implemented, will affect the businesses of card networks Visa and Mastercard. There are over 600 million RuPay cards in force as of January (latest available), of the 872 million credit and debit cards in India in the same period.

RuPay, the Indian card payment network, is a product of National Payments Corp. of India (NPCI), the umbrella organisation in charge of retail payments in the country. Since savings accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) or the government’s financial inclusion programme included the issuance of RuPay cards, the number of such cards soared quickly.

“RuPay card will have to be the only card you promote. Whoever needs a card, RuPay will be the only card you would promote and I would not think it is necessary today in India when RuPay is becoming global, for Indians to be given any other card first than RuPay itself," Sitharaman told bankers at the 73rd annual general meeting of the Indian Banks’ Association (IBA).

Make sure that the NPCI becomes a brand-India product which can be promoted elsewhere in the world, she said.

The minister also said banks need to ensure that all bank accounts are mandatorily linked to Aadhaar, and to PAN number where required, latest by 31 March 2021.

“So, ideally by December, if not then by 31 March 2021, every account should have a PAN where applicable and Aadhaar," she said, adding that over and above the bankers’ current work schedule, she would want them to ensure that this exercise is completed within the deadline.

“The financial inclusion story is not over and you still have inclusion to carry forward. You still have so many out there who do not have a bank account. When I say bank account, it is Aadhaar-seeded and do not want to hear from any bank that it can do direct benefit transfer (DBT) because the government wants it to do but does not know how many accounts are not Aadhaar-seeded," said Sitharaman.

She said, to the extent possible, banks must discourage non-digital payments and promote adoption of unified payments interface (UPI)-driven payments. “UPI should be a common parlance word in all our banks," said Sitharaman.

On the need for more large banks in India, Sitharaman said India is thirsting for more large banks. “There is a lot of amalgamation happening and I can always wish to have each of the amalgamated bank to be as big as SBI. We can have eight more SBIs in this country post-amalgamation," she said, adding that banks should put their energies in figuring out how best they can be, not just in size, but also in the kind of diversified activities.

“We want large banks as much as we want smaller finance companies, smaller banks, NBFCs because they can reach out. I am glad that the RBI has already worked out the co-origination rules for you all to function," she added.

Shayan Ghosh
Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Updated: 11 Nov 2020, 06:28 AM IST
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