Not perturbed by exits from payments bank race: Raghuram Rajan

Reserve Bank of India governor Raghuram Rajan said on Tuesday that he's not overly perturbed by the fact that some players have pulled out of the Payments Bank race recently. 

Answering a question at the post-monetary policy meet press conference, Rajan said, "we gave out licences to anyone who had the appropriate qualifications. We want to make sure licence rationing is in the past." If anything, he said, the RBI's move to give out an in-principle nod to 11 entities last year to set up payments banks, "suggests that licencing by RBI has been liberal."

The RBI gave an in-principle nod to 11 entities in August 2015. However, since March this year, three players have dropped out, viz., Cholamandalam Finance, Sun Pharma's Dilip Sanghavi along with IDFC and Telenor, and Tech Mahindra have opted out.   

We gave out the licences but "we presume they (the entities) also analysed the potential business prospects after seeing other players," he said.

He said, setting up payments banks would work well for entities who already have many operations and touch points -- many kiosks to cash in and cash out -- like mobile operators. While Airtel is already in the works of setting up a payments' bank, "I presume other mobile operators will go the full way too," he added.

Going ahead, Rajan said he hopes that players do the full due diligence before applying but he maintained that "that said, I'm not overly perturbed that some pulled out."