The Reserve Bank of India will start the process of assessing prospective promoters and subsequently issuing licenses to set up payment banks by November-end, governor Raghuram Rajan said at a conference in Mumbai. He said RBI will put out guidelines on new entities called payments banks which will offer accounts to the exclued and they will use technology to link them over the last mile. And the central bank will start the process of accepting applications from prospective promoters of small banks and payments banks by month-end, he added. Rajan clarified that these small banks will be allowed to have a nationwide presence as long as they lend only to small businesses and will consider allowing them to evolve into full-fledged commercial banks. Rajan visualized a major role for mobiles in the proposed system and as such mobile companies and companies with a large rural presence and possibly post offices coming into these payments bank licences. He said complete financial inclusion would take five to 10 years and emphasized that it is important to inculcate a savings habit – the financial management habit so that people can handle money and only later when then learn to handle money that they can be exposed to credit.
