Times of India: Bengaluru: Sunday, September
09, 2018.
For all the fervour payments banks have generated
in India, their total deposits are just under Rs 540 crore which is lower than
funds mobilised by some large bank branches. Of the four payments banks
operating in India, Airtel Payments Bank had deposits of Rs 306 .74 crore,
Paytm Payments Bank (Rs 193.68 crore), Fino Payments Bank (Rs 37 crore) and
India Post Payments Bank (IPPB) (Rs 1.39 crore respectively).
To put this into perspective, deposits of
payments banks are less than 0.005% of overall bank deposits of Rs 115 lakh
crore. In the case Paytm the Rs 193 crore deposits pale in comparison to the Rs
3,500 crore the bank aims to spend in three years merely to complete the KYC
(know your customer) process for its existing customer base. A response to a
Right to Information (RTI) query from ToI revealed the deposit numbers as on
May 2018. The first payments bank was launched about 18 months ago by telecom
major Airtel, followed by FINO Payments Bank and Paytm Payments Bank, which
transferred its wallet business into the new entity.
Although RBI granted 11 applicants,
in-principle approval to set up payments banks, three applicants dropped out as
they had doubts of the business model. IPPB started pilots last year; it was
only formally launched by PM Narendra Modi last week. Promoters of payments
banks have argued that their success should not be measured with the size of
their deposit base as their objective is to enable transactions. However, since
their objective is inclusion, the financially excluded can do transactions only
if they maintain some deposits in their account. In comparison, accounts under
Pradhan Mantri Jan Dhan Yojna—which have has Rs 1 lakh deposit limit-- had
total deposits of over Rs 82,000 crore as of August29, 20018 with more than 32
crore accounts and 24.51 crore debit cards.
Payments banks are not allowed to hold
deposits of over Rs 1 lakh in each account. In fact, as reported earlier, Fino
Payments Bank has been asked to stop adding new accounts in its payments bank
after RBI found out it had more than the stipulated amounts of deposits in some
of its accounts. Previously, Airtel Payments Bank had met a similar fate after
RBI had barred it from opening of new accounts after the payments bank was
caught signing up subscribers without their consent. The ban on Airtel Payments
Bank was recently lifted. As reported last month, Paytm's payments bank too was
barred from adding new customers following an order from RBI. As of now, the
ban stands in place for the Noida-based entity. Paytm Payments Bank had
announced plans of investing $500million over a period of three years for KYC
compliance and scale up operations.
Emails sent by TOI to the four payments
bank in this story did not elicit any response. According to Arnav Gupta of
Forester, many of the payments bank offering Zero balance accounts is one of
the reasons behind such low amounts of deposits in payments bank accounts.
"This is a thin margin business and only a player like Fino has a minimum
balance requirement to open an account," he said. Government has been keen
to see the expansion of payments banks as it positioned the payments bank as an
asset-light model meant to promote the idea of banking beyond India's major
metro cities.