(LiveMint)
The future of payment banks is uncertain and while the business will expand and evolve in time, they would require regulatory and government support to achieve their objectives, said a report by State Bank of India (SBI). The report said that recently, Aditya Birla Payments Bank (ABPB) announced shutting down its operations from 18 October, 2019 citing unanticipated developments in the business landscape that have made the economic model unviable. On 15 July, Vodafone m-Pesa had also shut shop.
The payments bank model was conceptualised by Reserve Bank of India (RBI) on recommendation of the Nachiket Mor committee for furthering financial inclusion by providing small savings accounts and payments services to unorganised sector entities. “However, it seems to have failed to achieve the stated objectives, as only 4-PBs are operational out of the 11 licensed players. In 1990s also, RBI had made an attempt to create Local Area Banks (LABs) that are currently facing a host of issues,” the report said.
