There is clear recognition that payment bank is low-risk: Paytm

Paytm Payments Bank CEO Shinjini Kumar said the guidelines for payment banks are very progressive. There is a clear recognition that payment bank is a low-risk model and it would succeed when it has flexibility, she said, adding that players can differentiate themselves.

On liberal rules, she said e-KYC is acceptable for a bank which is more consistent with existing guidelines.

Payments banks have a large battle to fight with small value remittances, she said, adding that they will hit the ground running when the payment bank is launched.Below is the transcript of Shinjini Kumar's interview to CNBC-TV18's Latha Venkatesh.Q: Are you satisfied with the rules, are they liberal enough for you to in terms of  access points, business correspondent rules?A: Yes, this is very progressive. There is clear recognition of the fact that payments bank is a low risk model by the very construct and that it would only succeed if it had enough flexibility to differentiate according to the nature of the entity that was running the business. I think there is enough flexibility within these guidelines for  players to differentiate themselves and create impact.Q: What would you describe as liberal rules, is it that you can do with just e-KYC, you don't have to give physical passbooks, what exactly do you find liberal?A: e-KYC is in any case acceptable even for a bank because e-KYC really is the most secure way to identify a person, even better than a person walking into a branch and showing all papers. So, that I think is more consistent with existing guidelines. However the fact that we can take a call on vet signatures, that is very good because it moves you in the digital direction when there is already a Aadhaar directory and a whole consent architecture being setup etc. So, you are basically driving the system in the direction of  a digital infrastructure that is already available. As we begin to use it that infrastructure will get tested and get improved and refined and that is the only way to move. So, that is fairly interesting and encouraging.Also it would have been a very big challenge if there were stipulations like you have to send passbook or you have to sent paper statements because that would impose a cost but in my view there is also a risk particularly in rural areas there is only one channel of delivery. So, if you are sending everything through the same postman, you are actually increasing risk. So, if you can have a diversity of channels and you can price it according to the need, that is great.Q: What kind of competition do you expect? For instance if you are a telecom company, you can have all your access points, the guys who are selling your prepaid cards as your branches. Does that make life easy for a telecom company to launch a payment bank, you expect competition from that quarter?A: In my view payment banks have a very large battle to fight with the use of cash for small value transactions and small value remittances. In that battle there will be a extraordinary number of cases all of which will never be captured by the same player using the same sort of channel. Therefore every entity being vested in a certain type of infrastructure, having  a certain type of understanding, a certain type of client base, we will use that to its advantage.For example we feel that because we have the ability to - we are on Smartphone, we have  large customer base, so that could be an advantage. Similarly for telecom companies they have a channel that can handle cash because they have  built it over the years. So, different people will play to different environment.Q: So, no more requests to the RBI, you are happy with things as they are?A: Since we will all hit the ground and this will be a new world, we will always require  that engagement, great point is that RBI is willing to engage.Q: So, when are you hitting the ground as a bank?             A: I think that is an answer that we will give you after little while because we need to firm up that date.