Lim­i­ta­tions Now

Consumer Voice - - Payment Banks -

- Given the gen­eral re­luc­tance of peo­ple (only five per cent of all trans­ac­tions are elec­tronic) to adopt elec­tronic pay­ments (plas­tic money/on­line pay­ments), it re­mains to be seen how pay­ment banks can build a pure trans­ac­tion fee-based busi­ness. There does not ap­pear to be a spe­cific men­tion of whether or not pay­ment banks will be re­quired to pay in­ter­est on the de­posits ac­cepted – and if so, whether it will be in line with those for ex­ist­ing li­censed com­mer­cial banks. Pay­ing in­ter­est on de­mand de­posits will trans­late into sig­nif­i­cant added costs for pay­ment banks and may make the whole project un­vi­able. - The ab­sence of In­ter­net and wi-fi con­nec­tiv­ity in ru­ral belts poses a clear chal­lenge. This can be tack­led ef­fec­tively if the gov­ern­ment and RBI be­come proac­tive and in­volve TRAI/tele­com com­pa­nies in pro­vid­ing im­me­di­ate e-plat­forms.


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