Differentiated Banking Flashcards
Idea of Differentiated bank mooted by – comte for —. AKA —.
It can be classified as Payment Banks, Small
Finance Banks, Regional Rural Banks, Local
Area Banks Wholesale and Long-Term Finance
(WLTF) banks.
Nachiket More Committee 2014 for Fin. Inclusion
Niche banks.
Payment banks- Generally promoted by —-.
Requirements-
1) Have min Cap of –
2) Maintain – of deposits in –. 3) Maintain – of deposits in other banks. 4) Have atleast 26% investment by —. 5) Get listed if net worth crosses —. 6) Have 25% of branches in —-. 7) Be fully – and — driven. 8) Have – cap for deposits in one acct.
Prepaid card issuers, telecom companies, NBFCs, Business correspondents, Supermarket chains, Corporates, Realty sector Co-ops and PSUs. Rs. 100 crores- 75% in govt bonds- 25%- Indians- Rs 500 crores- Unbanked areas- Networked and tech driven- Rs. 1 lakh cap for deposits in one account.
Payment Banks can-
- Offer — banking.
- Sell —,–,–.
- Offer — service for customers.
- Have – and —
- Can function as – of another bank.
Internet banking- Sell mutual funds, insurance, pensions- Bill payment service- ATMs and Business- Banking correspondent.
Payment Banks CANNOT-
- Offer – cards
- — loans
- Handle cross- border —
- Accept —.
Credit Cards- Extend loans- Handle cross border remittances- accept NRI deposits.
Small Fin banks- Generally promoted by- —.
Min Cap of —-.
Individuals/ professionals with 10 years experience in finance, NBFCs, microfinance cos, local area banks. Rs 100 crore.
Requirements-
- – loans to PSL
- — branches in — areas.
- Maintain —
- Cap loans to individuals and groups at – and– of net worth.
- Have a — network.
75%- 25% branches in unbanked areas- Reserve requirements- 10% and 15% of net worth- Have a business correspondent network.
Small finance banks can-
- Sell — to customers
- Sell —,—,—
- Can convert into a — ONLY after – approval.
- — across country.
-Sell FOREX to customers -Sell mutual funds, insurance, pensions - Can convert into a full fledged bank - Expand across the country - Transform into a full fledged bank, but ONLY after RBI’s approval.
Small finance banks CANNOT-
- Extend — loans
- Float —-
- Cannot deal in — products.
Large loans- Float subsidiaries- Cannot deal in sophisticated financial products.
—- 1st UCB to convert in SFB on approval of RBI under scheme of —- of UCB into an SFB. Under this UCBs with a min net worth — and maintaining CAR of – and above are eligible to apply.
Shivalik Mercantile Cooperative bank ltd to a small finance bank- Voluntary transition Scheme.
Min net worth- Rs.500 million and CAR of 9% and above.
Recently RBI released draft guidelines for — of SFBs- this would mean that RBI will accept applications throughout the —.
ON-TAP licensing- throughout the year.
- – Min announced setting up of Devlp banks to boost econ.
- These banks provide — for capital intensive investments spread over long period.
Finance ministry.
Long-term credit for capital intensive investments.
Devlp banks also provide services like- in-house —,— and—.
These are supported by govt in the form of — and admin mandates for — to — in their —.
in- house technical expertise- underwriting new capital issuance and creating confidence in other lenders.
Tax incentives- private sector banks and financial inst.- invest- securities.
In India, development banking started with est of —- in — to provide fin to medium and large scale industries.
After— report on– in 1991, these were — to form—-.
Narsimhan Comte report- on fin. reforms- disbanded-converted into commercial banks
RBI approved formn of — which will be the – banking network in Kerala which is a — bank.
2 types of coop. banks-
Kerala bank- Largest- Cooperative bank.
Urban and rural.
Rural coop. banks based on – term coop credit are divided into-
—,—-,—.
and — inst are either — or —- .
Short term coop credit- State coop banks- Dist coop banks- Primary agricultural credit societies.
Long term inst- State Coop agri and rural devlp banks(SCARDBs) or Primary Coop agri and rural devlp banks (PCARDBs)
