25-Sep-2018: Finance Minister launches web portal www.psbloansin59minutes.com

The Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley launched a transformative initiative in MSME credit space. The web portal www.psbloansin59minutes.com will enable in principle approval for MSME loans up to Rs. 1 crore within 59 minutes from SIDBI and 5 Public Sector Banks (PSBs). It is a strategic initiative of SIBDI led PSB consortium incubated under the aegis of Department of Financial Services (DFS), Ministry of Finance. The Portal sets a new benchmark in loan processing and reduces the turnaround time from 20-25 days to 59 minutes. Subsequent to this in principle approval, the loan will be disbursed in 7-8 working days.

A first in MSME banking credit space, www.psbloansin59minutes.com is one of its kind platform in MSME segment which integrates advanced fintech to ensure seamless loan approval and management. The loans are undertaken without human intervention till sanction and or disbursement stage. A User Friendly Platform has been built where MSME borrower is not required to submit any physical document for in-principle approval. The solution uses sophisticated algorithms to read and analyse data points from various sources such as IT returns, GST data, bank statements, MCA21 etc. in less than an hour while capturing the applicants basic details using Smart analytics from available documents. The system simplifies the decision making process for a loan officer as the final output provides a summary of credit, valuation and verification on a user-friendly dashboard in real time.

The key features of the contactless platform include:

  • Majority stake of SIDBI & big 5 PSBs- SBI, Bank of Baroda, PNB, Vijaya and Indian Bank.
    A first for MSME borrowers-Connect with multiple banks without visiting the branch.
  • Advanced Digital Platform for MSME Financing with Services Driven Architecture and highest level of Information Security.
  • Only Platform in the market with a Banker Interface which covers the Branch Level integrations (with maker-checker-approver) in tune with current systems of PSBs.
  • Only Platform that enables Bankers to create Loan Products in line with the Scoring models & assessment methods within their approved credit policy.
  • Only Platform that has an integrated GST, ITR, Bank Statement Analyzer, Fraud Check and Bureau Check as well as host of other features which at present is not available with any other player in the market.
  • Only Platform that has been integrated with CGTMSE for checking the eligibility of Borrowers. MSME borrower gets loan up to Rs.2 crore without any collateral, which is major relief for MSME borrower.

23-May-2017: Paytm launches its Payments Bank

Paytm has finally rolled out its Payments Bank, which is an almost-complete banking solution offered by the company. The digital wallet and e-commerce service provider received the final license from RBI for the bank last week. With the launch, Paytm is transferring all wallets to the new Paytm Payments Bank. Under the new banking system, wallets and accounts will be two separate entities. In order to be a part of the banking system, the user will have to open a bank account with Paytm.

A Payments bank is similar to any other bank except it operates on a smaller scale. The Reserve Bank of India (RBI) introduced it in 2014 to increase the scope of financial inclusion to small savings account holders, low income households, small businesses, unorganised sector entities and migrant labour force.

Customers can deposit only up to Rs 1,00,000. Payments bank can issue ATM/debit cards but not credit cards. Payments and remittance services through various channels can be done. Customers will be able to buy insurance and mutual funds. Bank would not carry out lending activities. With this, the network of 1,54,000 post offices (including 1,30,000 rural post offices) will be offering banking services to the masses in the country.

Payments banks are targeting migrant labourers, low income households, small businesses, and other unorganised sector entities. Initial capital required for a Payments bank is Rs 100 crore.

Eligibility: Existing pre-paid payment instrument issuers, individuals, professionals, NBFCs, corporate business correspondents, telecom companies, super-market chains, real estate sector cooperatives that are owned and controlled by residents and public sector entities may apply. Promoter’s contribution initially must be 40% for the first 5 years. For foreign holding, it is up to 74% of paid-up capital, on a par with private banks.

The banks must maintain CRR, minimum 75% of demand deposits in government bonds of up to one year and maximum 25% in current and fixed deposits with other scheduled commercial banks for operational purposes and liquidity management.

29-Jan-2017: India Post gets payments bank license from RBI

India Post has received payments bank license from the Reserve Bank of India to start rollout of banking operations commercially under the permit.

In 2015, RBI had granted ‘in-principle’ approval to 11 entities, including Department of Posts, to set up payments banks and proposed to give such licenses ‘on tap’ basis in future.

3-Jan-2017: Paytm gets RBI approval for payments bank

Paytm has received final approval of the RBI to formally launch its payments bank and it expects to start operations next month. Payments banks can accept deposits from individuals and small businesses of up to Rs 1 lakh per account.

Paytm was earlier slated to begin operations around Diwali last year. In 2015, RBI had awarded 'in-principle' approval to Vijay Shekhar Sharma, the founder of One97 Communications, 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 is the only player that has commenced Payments Bank operations. Aditya Birla Idea Payments Bank is expected to launch services in the first half of 2017.

Sharma will hold the majority share in Paytm Payments Bank, with the rest being held by One97 Communications. Last month, One97 Communications had restructured its business ahead of the launch of the Payments Bank, merging the wallet business with payments bank operation.

Alibaba Group and its affiliate Ant Financial pumped in USD 680 million into Paytm's parent One97 Communications last year, taking its total shareholding to over 40 per cent in the country's largest mobile wallet operator, Paytm. However, the Chinese entity will not have a direct shareholding in the payments bank.