12 January 2022
NITI Aayog, the public policy think tank of the government of India, has released a discussion paper seeking comments from the public on digital banks, and offering a template and roadmap for a digital bank licensing and regulatory framework in India. The discussion paper recommends the setting up of digital banks, i.e., banks that do not have physical branches, which would completely work on the internet and other proximate channels to offer their services.
The discussion paper recommends a two-stage approach for the licensing of a digital bank i.e., a restricted digital business bank license which will be first stage and a full-stack digital business bank license which will be the second stage in the regulatory control over these digital banks. For the first stage, the digital banks will be required to test their product in the regulator sandbox of RBI. Upon successful completion of this step, the digital bank can obtain the full-stack digital business bank license.
Further, the report has also recommended that the minimum paid up capital requirement for the digital business bank license should be INR 200,000,000 (Rupees Two Hundred Million) and the minimum paid up capital requirement for the digital universal bank license should be INR 2,000,000,000 (Rupees Two Billion).
Please click here to read the discussion paper.
