Disappointed over not getting payments bank licence from the Reserve Bank of India (RBI) last month, prepaid payment instrument (PPI) players have decided to write to the banking regulator why they had been omitted in the licening process.
Last month, RBI awarded a payments bank licence to 11 out of 41 entities that applied, but no non-telecom PPIs were able to secure a licences. Reliance Industries, Airtel M Commerce, Aditya Birla Nuvo and Vodafone m-pesa, are some of the players that were given a licence. The main responsibility of payments banks will be to offer remittance services, but they will also be allowed to offer simple financial products. These entities, however, are not allowed to lend.
Some of the non-telecom PPIs that had applied for a licence but were not successful — One MobiKwik Systems, Oxigen Services, and Itz Cash - will write to RBI on what are the areas they should improve upon to secure a it.
“While we are disappointed that no non-telecom prepaid instrument issuers has received a licence for a payments bank, we look forward to the on-tap licensing regime. We will write to RBI for guidance on the deficiencies,” said Naveen Surya, managing director, Itz Cash Card and chairman, Payment Council of India.
Surya added with 96 per cent of all retail payments amounting to $2 trillion still in cash (all recorded transactions), the opportunity is huge for all players in the system to move towards a ‘cashless’ economy.
“Oxigen has worked hard and toiled to develop an ecosystem that the RBI guidelines prescribed as desirable conditions. We have a track record of payments and remittances very few can match. It has therefore come to us as a complete shock to find people/companies, awarded the licence who have done very little in the financial inclusion space, the key objective contained in the guideline,” Pramod Saxena, chairman and managing director of Oxigen Services, had said after RBI announced the names of successful candidates.
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RBI has said it intends to grant licences more frequently (on-tap ). The regulator believes some entities who did not qualify in this round could be successful in future rounds.
“We will also request the banking regulator to start the on-tap licensing process in the next six to 12 months,” said Surya.