Page 9 - Banking Finance January 2022

RBI CORNER

companies other than NBFCs, unincor- Deputy Governor, Reserve Bank of In- sumer base of about 118 crore mobile
porated bodies and individuals," the dia (RBI). users, of which about 74 crore have
report said. Another significant chunk "Given that banking is a highly lever- smart phones, indicating that there is
of complaints pertains to lending apps aged business dealing with public a significant number of feature phone
partnering with NBFCs especially users in the country, RBI said. This
money, it makes sense to keep indus-
smaller NBFCs (asset size of less than points to the fact that feature phone
try/business and banking separate,"
Rs 1,000 crore). users have limited access to innovative
Rao said. This separation is expected
payment products like UPI, a real-time
to avoid spillover risks, where trouble
Indian economy recovering anywhere in the group entity may re- payment system developed by the
well; Omicron a risk: RBI sult in transferring risks on to the de- National Payment Corporation of India
positors, leading in turn to claims on (NPCI) for inter-bank transactions.
The Indian economy "continues to
deposit insurance with subsequent To be sure, feature phones currently
forge ahead, emerging out of shackles ripple effects cascading across the have the national unified USSD plat-
of pandemic," but the rise of the Omi- largely interconnected financial sys- form (NUUP) option to avail of basic
cron variant has emerged as the big- tems, creating concerns around finan- payment services using the short code
gest risk factor, said the state of the
cial stability, he said at the Mint Annual of *99#, but RBI said this has not
economy report released with the
Conclave. picked up.
December bulletin of the Reserve Bank
of India (RBI). "These issues have been flagged by the "This move will increase digital pen-
IWG (Internal Working Group) also and etration of financial services and help
The Indian economy bounced back
therefore, it is necessary that we a large segment of people without
strongly in the second quarter, as the access to smartphones or reliable
closely examine the related matters
gross domestic product (GDP) sur- before thinking of permitting large in- internet services to transact digitally,"
passed its pre-pandemic levels, and said Adhil Shetty, chief executive of fi-
dustrial houses or NBFCs owned by such
inflation broadly remained under the 6 nancial services marketplace
houses to set up any new bank."
per cent range, the upper band of the BankBazaar.com.
On the IWG has recommending that
tolerance range of the RBI. The RBI's RBI also proposed enhancing the trans-
the cap on promoters' holding in long
medium-term target is to keep retail action limit on UPI payments for the
inflation at 4 per cent. In November, run be raised to 26 per cent (from ex- retail direct scheme and initial public
the retail inflation came at 4.91 per isting 15 per cent), Rao said, "we have offering (IPO) applications to Rs. 5 lakh,
cent, but wholesale price index (WPI), agreed with the views of the IWG from Rs. 2 lakh earlier. Launched re-
which have tried to strike a balance
which it no longer targets, came at a cently, the retail direct scheme allows
between the challenges posed by con-
12 year high of 14.23 per cent. individual investors to directly invest in
centration of ownership on the one
"A host of incoming high frequency in- hand and diffusion of ownership on the sovereign debt papers, aiming to bring
dicators are looking upbeat and con- other." more people into the bond markets
sumer confidence is gradually return- and widening the market borrowing
opportunity for the government.
ing. Aggregate demand conditions RBI opens UPI to basic
point to sustained recovery, albeit,
with some signs of sequential modera- phones Gold bars seized by I-T
tion," the report said. The Reserve Bank of India (RBI) is set Dept to be sold to Reserve
to bring more users under the ambit
Jury is still out: RBI Deputy of the homegrown unified payments Bank
interface (UPI) channel, opening it up Finance Ministry has decided that
Guv on entry of big biz for feature phone users. hereafter seized or confiscated gold
groups in banking Feature phones are basic phones, will be sold to the Reserve Bank of In-
"The jury is still out" on the issue of which typically provide voice calling dia (RBI) only. This does not include
allowing big corporates into the bank- and text messaging functionalities. In- gold ornaments or jewellery.
ing space, says M Rajeshwar Rao, dia has a large mobile phone con- The Ministry has amended the guide-

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