Small Banks in the Payment Banks

The technology driven storm of payment banks is approaching fast towards smaller banks and no seems to be preparing for it.
It’s important to know that the majority of payment banks came from telecoms or e-wallets. They have already established that financial transaction does not need a brick and mortar branch or an ATM or even a POS machine. Come to think of it more people are getting their phones recharge on a daily basis from a telecom affiliate than the people requesting their account balance from the banks.

The Payment Banks are coming in with technology driven banking, smart marketing and have deep pockets to establish themselves as the banks for tomorrow. With the Mar 23, 2017 launch of Paytm Bank, a lot will be dwelled on the structure of Payment Banks in near future, I would rather like to write more about the small banks that have built their business in last ten to twenty years of hard labour and their readiness to tackle this incoming wave.
To start with, mobile banking needs to be part of these smaller banks as the first step towards handling the upcoming market share losses. And for this the first requirement is a Mobile Banking license.
Only 217 of 604 recognised banks have a mobile banking license (Including payment banks). Of the rest 387, a majority are District Level Cooperative Banks (DCCBs). Together with SHGs DCCBs form backbone of safe and secure rural credit disbursing. The list also includes various Regional Rural Banks, State Cooperate Banks and many urban cooperative and local banks.
The fact of the matter is that many of these are essential to Bharat, while India extracts profit from new age banking, despite the fact that the reasons for not having (or surrendering) the mobile banking may range from having a low CRR to overall bad business. Then there is a curious case of 71 Banks that have a Mobile Banking License but no Mobile Banking Product. RRBs, urban cooperative banks, and local banks are once more on the list. While most of these banks are ready with the essentials to deploy the Mobile Banking Solution – IMPS connectivity, CBS etc the hitch to deploy and maintain a mobile banking solution comes from a huge threshold costs required to enter the domain, on a (comparatively) lower user base. Then there is the cost of maintenance of these apps which itself is on a higher side.
These banks need to be supported with innovative products for the inclusive growth of India well-being of these banks is imperative. We at Taisys have come up with a unique solution to help deploy the Mobile Banking Solution for such banks at no cost to ourselves and make it a profit centre instead of cost centre for smaller banks. In our solution, we just need to connect to the core banking and our product is readily available for the users to start using.
These 71 banks have already taken the first step towards taking their banking to next level, but a lot more needs to be done to truly meet market pressures exerted by the new entrants Indian banking