For example, the proposed Post Bank could start as a payment bank, making use of post office outlets to raise deposits and make payments. Key in any new structure is that there should be no arbitrage possibilities hurting the current banking system. Today, a commercial bank can convert itself into a payment bank by maintaining 100 percent SLR margins.
Of course, it may not want to, because it seeks to make more money through corporate lending, but this possibility indicates regulations will not favour a payments bank unduly. Some of my colleagues believe a payments bank will be unviable, while others believe that it will skim the cream of banking business away from regular commercial banks.