Money & Banking

Payments banks yet to make profits

G Naga Sridhar Hyderabad | Updated on January 09, 2018 Published on December 22, 2017

Weighed by large expenditure on creating new infrastructure

Profit after tax and earnings before provisions and taxes were negative for payments banks (PBs) in 2016-17, mainly due to large expenditure on creating new infrastructure, according to the RBI.

The RBI said the impact of starting-up expenditure was reflected in the negative reading of return on assets and return on equity, notwithstanding a positive net interest margin of PBs.

“A more realistic assessment of PB’s financial and operational performance will be possible once more data are available and as these banks expand their operations,” the RBI said.

The RBI began issuing payments bank licences in 2015-16. So far, seven licences have been issued, of which, two banks, Airtel Payments Bank and India Post Payments Bank, commenced operations before March 31, 2017, and two others, Paytm and Fino, started operations by the quarter ending June 2017.

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Published on December 22, 2017
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