RBI issues 'in-principle' license to eleven entities for payments bank

Are these menaces to established banks?

It has been reported that RBI has issued 'in-principle' license to eleven entities for payments bank.

According to a research note from Maybank Kim Eng, it does not see these banks as immediate threats to established banks.

Leading banks are already offering payment wallet and remittance services to their customers. New payments banks would have to use innovative techniques to garner customers.

Here's more from Maybank Kim Eng:

Given the limited scope of service offering, profitability would be lower. RBI intends to enhance the financial inclusion program in which payment banks would aid.

Entities in telecom, information technology, retail and finance sector have been issued payment bank licence.

Scope for such banks would be restricted to remittance, acceptance of deposit up to a specified limit, and cross-selling of low-risk products.