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The CavinKare Moment of Indian Banking

An interesting discussion on payments banks happened during my recent visit to Bhopal, where I met a bank branch manager friend of mine. The branch manager – let’s call him ‘Ravi’ – wondered if I still believed in the concept of payments bank, given that three entities have dropped their plans.

Abhishant, considering 3 of the 11 in-principal license holders of the payments bank have already given up the license, do you still believe in the concept of payments bank? Ravi asked me.

Me: Ravi, history is full of innovation waves wherein a single intervention by the human mind changed everything around it.

  • Apple forever changed the face of smartphones with the App store
  • Napster impacted the music industry forever
  • M-Pesa made an entire generation to leapfrog the access of financial services

It may sound a bit far-fetched to you, but the payments bank license is one such opportunity in Indian financial services landscape. An opportunity (along with small finance banks) that has the potential to transform banking and for good.

Let us first understand the principal reasons why the concept of payments bank came into the picture.

As per RBI draft guidelines, the p ...

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