"These were chosen from 41 applicants who wanted to start Payment
systems. The manner in which 11 Payments Banks were shortlisted is
inconsistent with the rule of law. It is not clear how the RBI came to
the number of 11 payments banks, or why licences were denied to the
others...
"The arbitrary and malicious decision (of RBI) appears to be a big scam...," Swamy said in a
statement.
From the very outset, he said, it is not clear why RBI chose to use
the Banking Regulation Act, 1949, to licence Payments Banks when
Parliament has made separate law for governing payments systems under
the Payments and Settlement Systems Act, 2007.
Although the RBI stated that the 11 entities were chosen by an
external evaluation committee, Swamy said "without casting any
aspersions on the members of the committee, this is, sadly, not a due
process of law".
"There is no explanation on how the committee evaluated each
criterion... ," he said, adding RBI did not provide for review or appeal
by rejected applicants. "This is also a violation of the rule of
law".
He further said that there would have been no problem had the RBI
granted 30 payments banks licences instead of 11. "It would have
promoted more competition and reduced costs to consumers". ..
Payments Banks are allowed to collect deposits (initially up to Rs 1
lakh per individual), offer Internet banking, facilitate money
transfers and sell insurance and mutual funds. Besides, they can issue
ATM/debit cards, but not credit cards.
Source : http://economictimes.indiatimes.com/
