RBI prohibits Airtel, Vodafone & Idea from using existing channels for payments banks business
Apparently when RBI issued the final guidelines on payments banks , it put in what is called a ring fencer rider . It means that RBI would allow corporate groups, non-banking financial companies (NBFCs) and public sector entities to set up a bank only through a wholly-owned non-operative financial holding company (NOFHC).
The NOFHC, registered as an NBFC, will hold the bank and other financial services entities of the promoter group. "The objective is that the holding company should ring-fence the regulated financial services entities of the group, including the bank, from other activities of the group,"
Now this would involve a large set up cost for the telecom operators it would compel operators who are planning to set up payments banks to invest afresh in retailer and distribution networks purely to support banking operations. so that effectively means that if Vodaofone wants to start a payments bank it will first have to float a wholly owned NBFC which in turn will float the payment bank, the separation of the entities will make it difficult for the telecom operators to use their existing infrastructure for the payments bank.
More on ring fencing
http://www.business-standard.com/article/budget/holding-company-to-ring-fence-bank-113022300057_1.html
Gold lenders and small banks
Gold lenders are eyeing the opportunity offered by RBI guidelines on Small banks. These lenders are in better position to take the advantge of the new door opened by RBI. Consider this
Mannapuram Finance has a extensive network of 3000+ branches across 27 states in the country.
Muthoot Finance has 4200+ branches spread across tier 2,3,4 markets in 21 states
This network is bigger than what most private sector banks and many public sector banks have , of this Muthoot has already applied for a banking license and Mannapuram is assessing the latest guidelines issued by the RBI for small financing segments.
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