RBI has invited applications for Payment Banks, just tried to analyse the impact of these banks on us (PSB’s). Both positive and negative aspects have emerged and also very high probability of five day banking.
According to RBI, payment banks can perform the following
- Open CASA accounts, initially they will be restricted to a maximum balance of 1.00 lac. ( RBI says initially later on they may withdraw this ceiling )
- Act as a Business Correspondent for other Banks.
The above two are the most important features for detailed guidelines please visit RBI website http://rbi.org.in/scripts/bs_viewcontent.aspx?Id=2900.
SBI, Reliance Joint Venture for payment bank, SBI with its vast experience in banking and reliance known for its ability to roll out world class projects within stipulated time is a deadly combination. Within a span of 5 years, their Kiosks, and BC’s( In number ) will exceed our branches.
Positive side of this, No crowd in branches. Each bank will have a tie up with one or other payment bank for acting as a BC. They will handle all our receipts and payments. Our role will be confined to taking care of lending. We can focus on more profitable avenues, No Jandhan accounts headache.
Negative side, we will loose our importance, no further recruitment, bargaining power of unions will come down, we may even see cost to company, variable pay etc., Common man will not be affected even if we go on strike for one month. It will be easy for the government to merge the banks. No promotions because banks will stop opening new branches. Stagnation in career for all young bankers. Biggest of all our CASA will come down drastically, and accordingly our profitability.
Now being private these payment banks may even work 24*7 with shift. Their employees will be mostly locals with a salary of 10 to 15k. I expect that stand alone BC’s with an HHM ( Hand Held Machines ) will even work for 12 hours per day. As per RBI guidelines, payment banks can render their services through their own branches, ATM’s, and Business Correspondents.
Now with all payment banks coming in and taking care of Cash Management, we can certainly hope for a 5 day week. We are busy in our wage revision no union has opposed introducing payment and small banks which are going to take on us in a big way. Imagine the situation where in the maximum limit of 1.00 lacs is removed our CASA will go down drastically draining our profits. We may get our 5 day banking, but think about our future, its bleak. We are the strongest lot in the financial sector, many may not know the fact that the insurance wage settlement is based on our bipartite. Payment and small banks are going to weaken us. ( Public Sector Banks ). Time to think, hope unions will take care of this after the bipartite.