Small finance banks and payment banks which are in the process of setting up operations have given their thumbs up to the Reserve Bank’s operating guidelines giving flexibility to know your customer (KYC) norms and the use of digital channel, especially moving away from wet signatures.
Suresh Sethi, co-chair of the Payments Bank Group of Payment Council of India and CEO of Vodafone MPesa, welcomed the use of existing telecom KYC for onboarding of new customers for opening an account.
Shinjini Kumar, CEO, Paytm Payments Bank said, “RBI’s new guidelines are a firm step in the direction of creating digital banking ecosystem. Moving away from wet signatures for account opening or ability to communicate with clients using a channel of their choice will help as we work towards our goal of bringing millions of under-banked and unbanked Indians into the mainstream economy. We will await alignment of the CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest) KYC process with these guidelines as current CERSAI process includes wet signatures.”
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According to Rishi Gupta, MD & CEO, FINO PayTech, the operating guidelines set the stage for a next phase of disruption in banking in India. PBs are exempted from the requirement of having a base branch for a certain number of BCs, which is required for commercial banks. While there is no relaxation on having customer deposits of above 1 lakh, such balances of above Rs 1 lakh can be swept into an account opened for the customer with any other scheduled commercial bank or small finance bank, he said.
Also, payment banks need not issue passbooks and the statement can be sent through electronic channels like SMS and email, ensuring paperless banking. “Another major takeaway is the fixed location, which is set up to monitor the BCs in the area and address customer grievances, will now be allowed to conduct banking business for PBs. This will help reduce the capex for setting up of brick and mortar branches,” Gupta said.
“In the capital measurement approach for operational risk specified at 18 per cent of the gross income (normal capital charge for operational risk as applicable to payment and settlement business) has now been made at par with commercial banks at 15 per cent.
On October 6, the RBI came out with operating guidelines for differentiated banks — payments banks and small finance banks — being set up to bring in new players who would leverage on technology for financial inclusion in a cost effective manner.