Fin services secy calls for on-tap licensing for small banks

Mumbai, Sep 1 (PTI) Financial Services SecretaryAnjuly Chib Duggal today hinted at more "loosening of thewindow" for starting small finance and payments banks. Describing the domestic banking system as "a veryhappening sector", Duggal said "since universal bank licencesare on-tap now, we could look at further loosening of thewindow for starting small finance banks and payments banks". This is expected to further deepen the ongoingfinancial inclusion drive so that more and more people couldbe brought under the formal banking system. Duggal, however, quickly added that this is somethingthat falls under the remit of the Reserve Bank. "It is actually the mandate of RBI. But clearly, thetime has come to have on-tap licensing for differentiatedbanks as well," Duggal said. "There is a massive financial inclusion drive. We arenot only looking at outreach programme of banks, but alsopulling in a number of existing institutions," she added whileaddressing the AGM of the national bankers’ lobby IBA here,along with Finance Minister Arun Jaitley. In 2015, RBI had issued in-principle approval to 11entities to launch payments banks and 10 for small financebanks. Though none of these licence holders startedoperations as yet, entities like RIL-SBI, Vodafone and Airtel,among others, are waiting to kick off their operations. She also said a search for CEO of the proposed postalbank is on. "I think by the end of next month, we may be veryclose to having a CEO, who will looking at a number of issuesof the postal bank," she said. Describing regional rural banks as the "original smallfinance banks", she said that given their huge outreach, thesecan be used as outposts for financial inclusion. Calling for speedier resolution of stressed assetsthat have crossed 12 per cent as of the June quarter, Duggallinked ability to cope with the changes with resolving assets,particularly in consortium arrangements. "The JLF (joint lenders’ forum) mechanism has somehowbecome a cold feet mechanism as it doesn’t seem to be workingthe way it ought to be. Unless we resolve these assets, we arenot going to be competitive as we go along," she said, addingthat the longer the delay in finding a resolution, the biggerthe risk becomes. PTI HV AA BEN DK ARDBAS