RBI Governor Raghuram Rajan on Tuesday said he was not "overly perturbed" by the surrender of payments bank licence by some companies, and suggested putting in place a mechanism to ensure that firms exercised due diligence before applying for licence in view of the cost involved in the scrutiny of applications.
"We are not overly perturbed that some people have decided, after analysis, that they will not go forward. In fact, it suggests the licensing was adequately liberal and that we have a variety of players coming in," he told reporters here after announcing the second monetary policy of the current fiscal that left key interest rates unchanged.
"We gave out licences to anybody we thought had appropriate qualifications to run a payments bank. We presume they also analysed the business prospects. After doing further analysis and seeing other players coming in, some of them decided to back off," Rajan said.
The Reserve Bank of India accorded in-principle approval to 11 applicants last year to set up payments banks, including the Department of Posts, Aditya Birla Nuvo, Airtel M Commerce Services, Fino PayTech, National Securities Depository, Reliance Industries, Tech Mahindra and Vodafone m-pesa.
Of these, Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services decided to surrender their licences.
"...payment bank works particularly well for those who have base of operations and many contact points and, therefore, can build upon that. A classic example is somebody affiliated with a mobile company with many kiosk through which you can do cash-in cash-out," Rajan said.
The RBI governor said: "People should acknowledge the fact that it imposes some cost on the assessors to go through the applications. We ask for a lot of information from various government agencies.
"We have to find some way that people devote adequate time to understanding whether they should apply or not. The days when licences were rationed and, therefore, you had to get one ... is passe," he added.
"Don't just go in for licence because it's a valuable property to have but instead do due diligence on your own. When you apply, it should be with the intent of fully carrying out," Rajan observed.
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