NSDL Payments Bank to start operations soon

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Mumbai, Oct 22: NSDL Payments Bank will soon join the ranks of specialised banks in the country, having received clearances from the RBI. The wholly owned subsidiary of NSDL is expected to start operations in a matter of weeks.
NSDL MD & CEO G V Nageswara Rao told TOI that it has become challenging for digital players to operate in the wake of the Supreme Court (SC) order denying Aadhaar-based authentication for onboarding customers. “However, there are business propositions present that we aim to pursue,” said Rao. He indicated that the opportunities could include partnering with players in the securities markets. “One option available for banks is to earn a spread from deposits, the other is to earn from transactions,” said Rao.
The new bank will be headed by S P Narayanan, who was with Idea cellular and Vodafone, and who also has a banking background. Payments Bank customer acquisition is seen to be more like the telecom industry — where most of the accounts are sold on the field and there is limited reliance on branches. NSDL’s advantage is that it is the third-largest securities depository in the world in terms of volume. Although it was initially promoted by IDBI, original promoters UTI and NSE have diluted their stake.
NSDL boasts of several strong banks as its key shareholders. It is high on technology and besides the securities market it has also been tasked with dematerialising educational certificates issued by institutions across the country. According to market sources, partnership with banks will help independent broking houses compete with bank-promoted stock brokerages in giving faster credit of sale proceeds.