Letters: One-stop banking

Apropos the report "Niche bank guidelines get thumbs-up from those keen to apply" (November 28), the set of guidelines are comprehensive and are likely to motivate many players to become a payment bank (PB). For millions of Indians, having total savings of up to Rs 1 lakh is a distant dream. PB depositors shall be handicapped if every time they save some money, they need to go to a regular bank for a fixed deposit or continuously suffer a lower rate of interest on savings. The Reserve Bank of India (RBI) must find a way to permit having some fixed deposits within the upper cap of Rs 1 lakh per account.

Theoretically, under the guidelines, a PB can work with a single brick and mortar branch and have other outlets such as ATMs or business correspondent (BC) locations. Not seeking a healthy balance between the bank branches and other outlets in a PB is a distinct weakness of the guidelines. While it is difficult to prevent frauds at the branches, expecting quality due diligence on far-flung BC locations is asking for too much.

Initially, the entire focus should be to make PBs operationally strong and commercially viable, and also to make them one-stop deposit banks for millions without access to modern banking.

Y P Issar Karnal

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