NSDL draws up blueprint to launch payments bank in a year
National Securities Depository (NSDL) would come out with its payments bank in a year, its Managing Director and Chief Executive Officer G V Nageswara Rao said here on Saturday.
Speaking on the sidelines of an event to commemorate touching Rs 100 lakh crore in value of assets held in the depository, Rao said NSDL’s focus would be to initiate customers into the digital payments ecosystem.
In August, the Reserve Bank of India (RBI) had granted the ‘in-principle’ approval to 11 entities, including NSDL, Department of Posts, Aditya Birla Nuvo, Reliance Industries, etc, to start payments banks.
The event was also attended by Union finance minister Arun Jaitley and the whole-time member of Securities and Exchange Board of India (Sebi) Rajeev Kumar Agarwal.
Speaking at the event, Jaitley called for improving the credibility and integrity of all market participants, including the regulators and corporates, to channel more household savings into the system.
“Though we have covered a reasonable distance over the past two-and-a-half decades in terms of financial market development, there is still a long way to go in terms of market depth.”
He also noted there has been considerable amount of institution-building and considerable amount of capacity-building in the past few decades in our financial markets. “But if the economy grows at the pace we are striving it to achieve, then we need to massively improve these capacities and their credibility.”
While congratulating NSDL on the achievement, Agarwal said there is a clear challenge that 90 per cent of the assets are held in only 300,000 accounts.
Jaitley said India’s household savings at 28-29 per cent is better than most other nations. The country can still have a considerably high level of savings and a good portion of that can be brought into productive investments, he added.
However, for this to happen, “we need to have more credible market institutions, regulators, depositories, corporates and other market-making bodies as also better quality of service from them. They also need to improve their integrity,” he added.
Stating that while most of the world is facing a gloom scenario, he said “their gloom is our boom”, though he noted that exports are a concern for the government. He also expressed concern over the rural stress following two successive years of poor monsoons, which brought down the spending power of the rural folks.
On the rising bad loans in the banking system, which crossed 13 per cent of the system in the June quarter, he said this is reflective of the stress in some key sectors of the economy like power, steel and other metals and expressed the hope that the recent measures will be fruitful.
On the reform measures of the Narendra Modi government, he said that unlike in the past, now “the number of obstructionists to reforms is very few and that if we don’t initiate reform measures to attain higher growth levels it will be unfair on our future generations”.