This refers to the report on the RBI issuing guidelines on payment banks and small banks (July 18). The RBI has prescribed a capital adequacy ratio of 15 per cent for payment banks. As the proposed bank can only invest in government securities and no lending is permitted, this clause is unnecessary. Its outside liabilities cannot exceed 20 times of net worth, which takes care of the interest of depositors. As these banks can take only demand deposits, to maintain liquidity, a substantial portion of deposit has to be kept idle. They have to maintain CRR and SLR also. What is left can only go to government securities. One wonders how these banks will be able to pay interest on deposits.
- S Kalyanasundaram, Chennai
The RBI’s guidelines are a welcome step, which is an essential measure towards meeting the objective of financial inclusion. But the guidelines should be more prudent, and let this not be a repeat of the Local Area Banks, a concept that was launched some years ago.
- Lakshminarasimhan
HBL
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