Mumbai: In a U-turn from her earlier stated position on the entry of payments banks, SBI chief Arundhati Bhattacharya on Tuesday said there is nothing negative about them and there is a huge opportunity for the entire banking system.
"I want to very clearly say that there is nothing to be negative about the payments banks. Because whenever you have challenge, the other side of the coin is an opportunity. And I think if we don't realise it then nobody else would do so," Bhattacharya said at the annual bankers summit Fibac here this evening.
"With this new competition, I think there is a huge opportunity out there for the entire banking sector. And this opportunity is for us to take," she said.
Last week, the RBI had given in-principle approval to 11 entities, such as Reliance, Airtel, Vodafone, Birla Group, Mahindra, among others, to set up payment banks.
On two occasions, Bhattacharya had raised concerns over the entry of payments banks and said these entities could eat into the share of the existing banks.
It would be a dog-eat-dog market if the deep-pocket corporates, which have bagged the payments bank licences, unleash a rate war, she said at the same event yesterday.
Earlier in the day, SBI Research, in a note, has said the 11 payments banks can free up assets worth Rs 14 trillion for the infra sector alone annually.
Last week, a day after the RBI issued the licences, she told Governor Raghuram Rajan that these new players would disrupt the universal banks with their technical agility.
She had said these banks would be coming in without any risk, they would be coming in with an agile system and delivery models and that they have not been held hostage by industry-level agreements and wage limits.
Reeling off a few data points about the high level of cash and lower retail to GDP ratio in India as against Southeast Asia, she said the banking sector has enough opportunities.
