(iii) Payment Banks/ Small Finance Banks (SFBs): Following the issuance of differentiated banking licenses, a number of such entities have become/ will shortly become operational. These banks will have the advantage of embracing state of art technology from beginning. Payment banks can’t lend directly but can be distributors of the credit products, while SFBs would predominantly be in MSME space.
This throws open meaningful oppurtunities for emergence of two-way/ three-way alliances between legacy bankers/ new banking entrants & fintech companies in the area of MSME financing. Key would be who develops a clear vision & moves fast. Conclusion 16.