Rbi holds a press conference on Yes Bank crisis. Rbi Governor Shaktikanta Das says, Depositors money is safe, Customers need not to worry.

Yes Bank Crisis: Rbi says, Depositor's money is safe

<p>After months of delay, Paytm is now all set to commence its payments bank operations from May 23, having received the final approval from the Reserve Bank of India (RBI).</p>

<p>&quot;...Paytm Payments Bank Ltd (PPBL) has received the final licence from the RBI and would commence its operations on May 23, 2017,&quot; it said in a public notice.</p>

<p>The company will transfer its wallet business, which has over 218 million mobile wallet users, to the newly incorporated entity&nbsp;PPBL, under the payments bank licence awarded to a resident Indian, Vijay Shekhar Sharma, the founder of One97 Communications that owns Paytm.</p>

<p>After May 23, the Paytm wallet will move to PPBL. In case consumers do not wish for that, they have to inform Paytm, which will in turn transfer the wallet balance to the consumer&#39;s bank account once such details are shared. Such communication will have to be made before May 23.</p>

<p>In case the wallet has been inactive with no activity in the last six months, the transfer to PPBL will only happen once the consumer gives specific consent.</p>

<p>Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account.</p>

<p>Paytm was earlier slated to begin operations around Diwali last year. In 2015, the RBI had awarded in-principle approval to Sharma to set up a payments bank along with 10 others.</p>

<p>With the objective of deepening financial inclusion, RBI kicked off an era of differentiated banking by allowing SFBs (small finance banks) and PBs (payments banks) to start services. A total of 21 entities were given in-principle nod last year, including 11 for payments banks.</p>

<p>Later, three entities - Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services backed out of the payments bank licensing.</p>

<p>Currently, Airtel and India Post are the only players that have started Payments Bank operations. Aditya Birla Idea Payments Bank is expected to launch services in the first half of this year.</p>

<p>Sharma will hold the majority share in Paytm Payments Bank, with the rest being held by Alibaba-backed One97 Communications. However, the Chinese entity will not have a direct shareholding in the payments bank.</p>

<p>Post the government&#39;s announcement of scrapping old Rs 500 and Rs 1,000 notes in November last year, Paytm has emerged as one of the main gainers as a huge number of people move towards digital currency. Wallet companies like Paytm and Mobikwik have registered spike in user base as well as the number of transactions.</p>

<p>(PTI)</p>


The company will transfer its wallet business to the newly incorporated entity?PPBL

After months of delay, Paytm is now all set to commence its payments bank operations from May 23, having received the final approval from the Reserve Bank of India (RBI). "...Paytm Payments Bank Ltd (PPBL) has received the final licence from the RBI and would commence its operations on May 23, 2017," it said in a public notice. The company will transfer its wallet business, which has over 218 million mobile wallet users, to the newly incorporated entity PPBL, under the payments bank licence awarded to a resident Indian, Vijay Shekhar Sharma, the founder of One97 Communications that owns Paytm. After May 23, the Paytm wallet will move to PPBL. In case consumers do not wish for that, they have to inform Paytm, which will in turn transfer the wallet balance to the consumer's bank account once such details are shared. Such communication will have to be made before May 23. In case the wallet has been inactive with no activity in the last six months, the transfer to PPBL will only happen once the consumer gives specific consent. Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account. Paytm was earlier slated to begin operations around Diwali last year. In 2015, the RBI had awarded in-principle approval to Sharma to set up a payments bank along with 10 others. With the objective of deepening financial inclusion, RBI kicked off an era of differentiated banking by allowing SFBs (small finance banks) and PBs (payments banks) to start services. A total of 21 entities were given in-principle nod last year, including 11 for payments banks. Later, three entities - Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services backed out of the payments bank licensing. Currently, Airtel and India Post are the only players that have started Payments Bank operations. Aditya Birla Idea Payments Bank is expected to launch services in the first half of this year. Sharma will hold the majority share in Paytm Payments Bank, with the rest being held by Alibaba-backed One97 Communications. However, the Chinese entity will not have a direct shareholding in the payments bank. Post the government's announcement of scrapping old Rs 500 and Rs 1,000 notes in November last year, Paytm has emerged as one of the main gainers as a huge number of people move towards digital currency. Wallet companies like Paytm and Mobikwik have registered spike in user base as well as the number of transactions. (PTI)

Paytm Payments Bank to start operations on May 23

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<p>As the hustle and bustle over demonetisation shows signs of slowly ebbing away, the question of the hour is, how will&nbsp; the Indian government use demonetisation to empower the poor?</p>

<p>Free market thinkers, such as economist C.K. Prahalad, were categorical in their pronouncement that one of the best ways to empower the poor would be to generate additional income for them. Prahalad reasoned, India&rsquo;s acute poverty could be far&nbsp;quickly tackled if the poor consumers situated at the Bottom of the Pyramid (BoP) markets get access to&nbsp;a formal financial support system.&nbsp;</p>

<p>&nbsp;Over a decade ago, Prahalad observed that the total market for credit in rural India is INR 15,000 billion; moneylenders mostly supply this need at 100 per cent interest rate. Unfortunately, the nationalised banks have just scratched the surface, providing only INR 40 billion of the total need.&nbsp;</p>

<p>Prahalad saw the economic potential of bridging this lacuna by bringing organised banking to the poor: &quot;even if the organized sector only got to INR 10,000 billion and reduced the interest rate from 100 per cent to 20 per cent, you can calculate the income generated for the poor.&rdquo;&nbsp;</p>

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<h5>Four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million</h5>
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<p>Unfortunately, however, until as late as 2014 only 40 per cent of India&rsquo;s population had bank accounts. To counter the trend, the Modi Government has introduced Jan Dhan account for over 250 million Indians that are operational at zero balance.&nbsp;</p>

<p>Courtesy the newly introduced banking scheme, PricewaterhouseCoopers <a href="http://www.cnbc.com/2015/10/15/india-sees-massive-drop-in-unbanked-population.html">reports</a>, the unbanked population in India dropped by a whopping 57 per cent;&nbsp; four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million.&nbsp;</p>

<p>A week after demonetisation, the finance ministry stated that as of 16 November 2016, INR 640 billion had been deposited in Jan Dhan accounts. Despite this success, the Prime Minister&#39;s People&#39;s Wealth Scheme website <a href="http://pmjdy.gov.in/account">reports</a> that close to a quarter of these accounts have zero balance.&nbsp;</p>

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<h5>Slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most</h5>
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<p>For the sake of argument, if we say half of this unbanked population is destitute and in no position to own INR 500 and INR 1000 notes, it leaves over 100 million who had cash but did not have the facility to deposit their high denomination notes in the banking system. This is, indeed significant and distressing.&nbsp;</p>

<p>&nbsp;</p>

<p>More traumatic is the fact that the slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most, simply because if the rich spend less than the poor earn less. Like it or not, a large part of what the rich spend goes as daily wages for the poor in the manufacturing sector, service sector, and farm sector as well as those working as domestic help.&nbsp;</p>

<p>So, if demonetisation has hurt the rich spenders by squeezing cash flow off the economy, it has hurt the poor even more because it hurt their earnings.</p>

<p>In India&rsquo;s shrill Left versus Right political discourse, the Opposition has highlighted the acute distress of the cash-starved poor. Whereas the government has touted the long term benefits of its digitalisation move.&nbsp;</p>

<p>As per initial reports, the artisans employed, particularly in the unorganised cottage industries, such as weaving, pottery and carpentry have been the hardest hit, followed by the farming sector. Not surprisingly, the Muslims who are predominant in these sectors have been the one hit hardest by demonetisation.&nbsp;</p>

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<h5>This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most</h5>
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<p>&nbsp;This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most. This is possibly the reason why the ruling party is less sensitive to the woes of the affected populace without realising that deep distress has taken the sheen out of the demonetisation drive.&nbsp;</p>

<p>Also, resourceful moneylenders have stepped into the cash vacuum. They were the only source of ready cash for the unbanked, albeit at high interest rates. Professor Prahalad would not have possibly envisaged that the effort to bring the population into the banking sector would have unwittingly pushed nearly a 100 million of the rural poor into the arms of the loan sharks.&nbsp;</p>

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<h5>A process based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders</h5>
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<p>The Indian government would do well to boost micro-credit and simplify terms of lending for Jan Dhan account holders to make demonetisation a pro-poor move. As shown by Grameen Bank of Bangladesh or even Bandhan Bank in India, micro-financing has seen much better success rate globally in terms of rate of return than retail or commercial banking. Licenses to 10 micro finance units have been granted by Reserve Bank of India in September 2015, making it possible to take micro financing in India rapidly to scalable levels.&nbsp;</p>

<p>Now that most of the INR 14,000 billion of currency in circulation have returned to the banks, it has increased bank liabilities dramatically. Unless the cash is quickly circulated back into the economy, the banks will have to shell out interests worth billions of rupees in the coming year, that could splash ink on their balance sheets.&nbsp; The simple way to do it quickly would be to offer micro-credit on the Jan Dhan deposits without additional paperwork.&nbsp;</p>

<p>For instance, a process-based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders. This would be of great benefit to a fifth of India&rsquo;s population who have recently entered the banking system.&nbsp;</p>

<p>For Prime Minister Narendra Modi, fighting to gain people&#39;s approval in four major poll-bound Indian states, this step would translate into good economics as well as good politics.&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


The Indian government should use the surge in Jan Dhan accounts following demonetisation to extend micro loans to the poor

As the hustle and bustle over demonetisation shows signs of slowly ebbing away, the question of the hour is, how will the Indian government use demonetisation to empower the poor? Free market thinkers, such as economist C.K. Prahalad, were categorical in their pronouncement that one of the best ways to empower the poor would be to generate additional income for them. Prahalad reasoned, India’s acute poverty could be far quickly tackled if the poor consumers situated at the Bottom of the Pyramid (BoP) markets get access to a formal financial support system. Over a decade ago, Prahalad observed that the total market for credit in rural India is INR 15,000 billion; moneylenders mostly supply this need at 100 per cent interest rate. Unfortunately, the nationalised banks have just scratched the surface, providing only INR 40 billion of the total need. Prahalad saw the economic potential of bridging this lacuna by bringing organised banking to the poor: "even if the organized sector only got to INR 10,000 billion and reduced the interest rate from 100 per cent to 20 per cent, you can calculate the income generated for the poor.” Four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million × Unfortunately, however, until as late as 2014 only 40 per cent of India’s population had bank accounts. To counter the trend, the Modi Government has introduced Jan Dhan account for over 250 million Indians that are operational at zero balance. Courtesy the newly introduced banking scheme, PricewaterhouseCoopers reports, the unbanked population in India dropped by a whopping 57 per cent; four years ago 557 million people were outside the banking facility but in 2015 it is down to 233 million. A week after demonetisation, the finance ministry stated that as of 16 November 2016, INR 640 billion had been deposited in Jan Dhan accounts. Despite this success, the Prime Minister's People's Wealth Scheme website reports that close to a quarter of these accounts have zero balance. Slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most × For the sake of argument, if we say half of this unbanked population is destitute and in no position to own INR 500 and INR 1000 notes, it leaves over 100 million who had cash but did not have the facility to deposit their high denomination notes in the banking system. This is, indeed significant and distressing. More traumatic is the fact that the slow cash flow into the economy due to demonetisation has hurt the segment situated at the bottom of the pyramid the most, simply because if the rich spend less than the poor earn less. Like it or not, a large part of what the rich spend goes as daily wages for the poor in the manufacturing sector, service sector, and farm sector as well as those working as domestic help. So, if demonetisation has hurt the rich spenders by squeezing cash flow off the economy, it has hurt the poor even more because it hurt their earnings. In India’s shrill Left versus Right political discourse, the Opposition has highlighted the acute distress of the cash-starved poor. Whereas the government has touted the long term benefits of its digitalisation move. As per initial reports, the artisans employed, particularly in the unorganised cottage industries, such as weaving, pottery and carpentry have been the hardest hit, followed by the farming sector. Not surprisingly, the Muslims who are predominant in these sectors have been the one hit hardest by demonetisation. This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most × This makes Mamata Banerjee, Mulayam Singh Yadav, Rahul Gandhi and Arvind Kejriwal bristle because demonetisation ends up hurting their vote banks the most. This is possibly the reason why the ruling party is less sensitive to the woes of the affected populace without realising that deep distress has taken the sheen out of the demonetisation drive. Also, resourceful moneylenders have stepped into the cash vacuum. They were the only source of ready cash for the unbanked, albeit at high interest rates. Professor Prahalad would not have possibly envisaged that the effort to bring the population into the banking sector would have unwittingly pushed nearly a 100 million of the rural poor into the arms of the loan sharks. A process based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders × The Indian government would do well to boost micro-credit and simplify terms of lending for Jan Dhan account holders to make demonetisation a pro-poor move. As shown by Grameen Bank of Bangladesh or even Bandhan Bank in India, micro-financing has seen much better success rate globally in terms of rate of return than retail or commercial banking. Licenses to 10 micro finance units have been granted by Reserve Bank of India in September 2015, making it possible to take micro financing in India rapidly to scalable levels. Now that most of the INR 14,000 billion of currency in circulation have returned to the banks, it has increased bank liabilities dramatically. Unless the cash is quickly circulated back into the economy, the banks will have to shell out interests worth billions of rupees in the coming year, that could splash ink on their balance sheets. The simple way to do it quickly would be to offer micro-credit on the Jan Dhan deposits without additional paperwork. For instance, a process-based system has been recommended that would provide prompt digital approval of micro-credit to all Jan Dhan account holders. This would be of great benefit to a fifth of India’s population who have recently entered the banking system. For Prime Minister Narendra Modi, fighting to gain people's approval in four major poll-bound Indian states, this step would translate into good economics as well as good politics.

Empowering the poor: Has demonetisation boosted micro-credit?

<p>Indian Prime Minister Narendra Modi on Saturday said that the decision on demonetisation is tough &quot;but (the) future will be bright&quot;.</p>

<p>He advised people, including villagers, to take the e-wallet route to withdraw money in order to counter problems while withdrawing money.</p>

<p>&quot;Era of wallet has gone, you can use your mobile phone as your bank branch with the same ease with which you take snaps and send them to friends,&quot; Modi said.&nbsp;</p>

<p>Earlier in the day, during his monthly address to the nation, Modi urged the nation, especially the youth, to embrace demonetisation of Rs 500 and Rs 1,000 notes and adopt digital banking.&nbsp;</p>

<p>About criticisms over implementation of the major currency move, Modi said that &quot;the disease which has infected the country for 70 years cannot have a simple treatment&quot;.&nbsp;</p>

<p>He appealed to people to be patient and allow the government the time need to fight black money. &quot;Time has come for everyone, particularly my young friends, to embrace e-banking, mobile banking &amp; more such technology,&quot; Modi tweeted.</p>

<p>He questioned the opposition&#39;s reluctance to digital banking and asked why they were resolute on its stand that the poor and rural population are not tech savy.&nbsp;</p>

<p>The government has launched programmes to assist people living in villages who do not have bank accounts yet.&nbsp;</p>

<p>He urged the citizens to participate in a survey and vote on the demonetisation policy through the Narendra Modi app on their mobile phones.&nbsp;</p>

<p>The scheme had the support of over 93 per cent of the 5,00,000 people, a statement put out by Prime Minister Modi&#39;s website said.</p>

<p>Modi also &nbsp;criticised opposition parties for announcing an all-India strike against demonetisation, saying they were organising the agitation at a time when he was trying to weed out corruption and black money.</p>

<p>&quot;I am stopping black money and corruption and some are giving call for Bharat Bandh (nationwide strike),&quot; Modi said during a rally in Uttar Pradesh.</p>

<p>Without naming any opposition party, Modi said: &quot;We are trying to curb corruption and they are organising &#39;Bharat Bandh&#39;. Should there be &#39;Bharat Bandh&#39; or should the route of corruption be blocked?&quot;&nbsp;</p>

<p>Meanwhile, the opposition -- spearheaded by the Congress -- clarified that while they would go ahead with &#39;Akrosh Diwas&#39; (Anger Day) on Monday to mark their protest, they would not hold a nationwide strike and bring the country to a standstill.&nbsp;</p>

<p>(WION with inputs from&nbsp;</p>

<p>&nbsp;</p>


He urged the nation, especially the youth, to adopt digital banking

Indian Prime Minister Narendra Modi on Saturday said that the decision on demonetisation is tough "but (the) future will be bright". He advised people, including villagers, to take the e-wallet route to withdraw money in order to counter problems while withdrawing money. "Era of wallet has gone, you can use your mobile phone as your bank branch with the same ease with which you take snaps and send them to friends," Modi said. Earlier in the day, during his monthly address to the nation, Modi urged the nation, especially the youth, to embrace demonetisation of Rs 500 and Rs 1,000 notes and adopt digital banking. About criticisms over implementation of the major currency move, Modi said that "the disease which has infected the country for 70 years cannot have a simple treatment". He appealed to people to be patient and allow the government the time need to fight black money. "Time has come for everyone, particularly my young friends, to embrace e-banking, mobile banking & more such technology," Modi tweeted. He questioned the opposition's reluctance to digital banking and asked why they were resolute on its stand that the poor and rural population are not tech savy. The government has launched programmes to assist people living in villages who do not have bank accounts yet. He urged the citizens to participate in a survey and vote on the demonetisation policy through the Narendra Modi app on their mobile phones. The scheme had the support of over 93 per cent of the 5,00,000 people, a statement put out by Prime Minister Modi's website said. Modi also criticised opposition parties for announcing an all-India strike against demonetisation, saying they were organising the agitation at a time when he was trying to weed out corruption and black money. "I am stopping black money and corruption and some are giving call for Bharat Bandh (nationwide strike)," Modi said during a rally in Uttar Pradesh. Without naming any opposition party, Modi said: "We are trying to curb corruption and they are organising 'Bharat Bandh'. Should there be 'Bharat Bandh' or should the route of corruption be blocked?" Meanwhile, the opposition -- spearheaded by the Congress -- clarified that while they would go ahead with 'Akrosh Diwas' (Anger Day) on Monday to mark their protest, they would not hold a nationwide strike and bring the country to a standstill. (WION with inputs from

Demonetisation: PM says era of wallet is gone, use mobile like your bank

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