The Reserve Bank of India (RBI) Governor Dr. Raghuram Rajan, on Thursday said Payments banks are an add-on to the banks rather than competitors. “Payments banks will be feeders into the universal banks... Payments banks can’t do some thing universal banks can do.”
Dr. Rajan also said that introduction of Payments banks will revolutionise banking, make it very exciting for customers and existing lenders will have to improve service to retain depositors. RBI granted ‘in principle’ approval for Payments banks to 11 entities.
“Universal banks have to provide full service. Banking will become more competitive and interesting,” said Dr. Rajan.
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Addressing the 2nd Banking & Economics Conclave 2015, organised by State Bank of India here, the RBI Governor urged real estate developers to reduce prices from the current levels. “I do believe that real estate developers, who are sitting on unsold stocks, should reduce prices on unsold stocks,” the RBI Governor said. “It differs across the country. We need the market to clear up...don’t need a situation where prices are high and demand doesn’t pick up. It will be a big help to the sector because once there is a sense that price itself has stabilised then more people will be willing to buy,” Dr. Rajan added.
On the economy he said “We do believe there is a pick up…if monsoon improves - sowing has been good -- rural demand will pick up,” said Dr. Rajan.
On devaluation of Chinese yuan, he said that the Chinese move raises questions on the strength of their economy. “If Chinese depreciation holds around this level it should be fine. If it is more it will be worrisome. You could have tit for tat actions.”
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