This refers to the report "Payment banks cannot launch other financial operations" (June 17). The payment bank concept is conceptually interesting but it will be difficult to predict if it will be economically viable. Payment banks will find it difficult to maintain a cash reserve ratio (CRR) of four per cent without any interest. And, investing only in government securities will not be an attractive business proposition for many corporates. Given that their major functions will be the remittance and utility bill business, this proposition does not appear very attractive since the utility bill payment market is already crowded in cities, where people prefer to make payments online. However, encouraging payment banks for the remittance business for migrant workers will be a good step towards inclusive banking.
Ravi Kant Mumbai
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