RBI rules on payment banks in a month, says S S Mundra

Reserve Bank of India Deputy Governor S S Mundra on Saturday said the final guidelines on small and payments banks were expected in a month.

"We have received comments (on discussion paper)," he said, while addressing students from the NMIMS in Mumbai.

RBI had come out with draft guidelines on the differentiated banks in July this year and had asked for comments on the same by August 28.

Concerns have been raised on the financial viability of these banks as the profitability of the business will depend on volumes as spreads are likely to be wafer-thin.

However, Mundra dismissed the concerns on the profitability for such bank.

He said that the banks can earn from a variety of avenues like charging for transactions and through investments in government bonds, which is allowed.

The banking regulator has allowed telecom companies, retailers, pre-paid issuers (PPI), non-banking financial companies (NBFCs), real estate cooperatives and public sector entities to apply for payment banks.