National Securities Depository Limited (NSDL) will soon launch its long delayed payments bank in India, MediaNama has learnt through a source. MediaNama has reached out to NSDL for a comment and will update the story when we hear from them.
According to the source, senior executives from the depository recently met Reserve Bank of India officials and, the central bank will issue a nod for it to commence operations in the near future. “From where we see it, there will be no more hiccups on the regulatory side,” the source said. “The launch will depend on when they [NSDL] are ready to roll out their services, but looking at the website and the information we got, it will be launched sometime around October-November,” they added.
According to an unrelated anonymous tip off, the NSDL also has a yet-unannounced website being developed by staticmagick.in. According to the website, the depository will launch a mobile banking application for Android called ‘Jiffy’. The app will let users open accounts, check balance, pay utility bills, and transfer funds.
NSDL’s payments bank has been delayed since inception
NSDL was one of the 11 entities to receive an “in-principle” approval to launch payments banks in 2015. Last year, NSDL MD and CEO G.V. Nageswar Rao announced that the payments Bank will begin operations from May 2017. However, it was delayed further. In May 2018 Rao said that the payments bank was awaiting the central bank’s approval to commence operations. At that time, Rao said that the service would begin in a month’s time.
What Payments Banks can and cannot do
According to the Reserve Bank of India norms, payments banks can accept deposits up to Rs 1 lakh per account from individuals and small businesses and issue debit/ATM cards.
Apart from this,
– Payments Banks need to have “Payments Bank” in its name to differentiate it from regular banks
– Can handle cross-border remittances of personal transactions or on the current account.
– Offer remittance services through branches, ATMs, Business Correspondents and mobile banking. They can also become business correspondents of other banks.
Competition in the Payments Bank space
NSDL payments bank will compete with the likes of the recently launched India Post Payments Bank, Airtel Payments Bank Ltd, Paytm Payments Bank Ltd, Aditya Birla Idea Payments Bank Ltd and Fino Payments Bank Ltd. Vodafone m-Pesa Ltd, which has a payments bank license, is yet to begin operations. On the other hand, Tech Mahindra, Dilip Shangvi- IDFC Bank- Telenor’s joint venture, Cholamandalam Investment and Finance Company have all surrendered their payments bank licenses. In June, we had reported that Infibeam was set to begin operations as a Payments bank.
It is important to know that the central bank has recently barred Fino and Paytm payments banks from adding new customers. While Paytm was barred from enrolling new users owing to its adherence to know-your-customer (KYC) norms, RBI penalized Fino after noticing some customers of have deposited amounts exceeding Rs 1 lakh in their accounts.