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India Front Line Report
SEAnews Issue:monthly
2014-12-12 ArtNo.45385
◆After record deal, more India bank takeovers on cards
【MUMBAI】India is set for more banking acquisitions after a record $2.4 billion takeover last week ended four years of a deals drought, as lenders fight for market share and wider reach amid looming competition from a new breed of players.
 A banking sector consolidation should support an expected recovery in Asia's third-largest economy through creation of stronger lenders that will control the growth of bad loans and make credit availability easier.
 The Indian banking sector is fragmented, with 46 commercial banks jostling for business with dozens of foreign banks as well as rural and co-operative lenders. State banks control 80 percent of the market, leaving relatively small shares for private rivals.
 "Deals will happen in the banking sector, but relatively fewer compared to mergers in other non-regulated sectors," said Sanjay Doshi, a partner at consultancy KPMG, referring to segments such as industrials and consumer where there is no sector-specific regulator.

○RBI issues final norms for uniform payment collection system
【MUMBAI】The Reserve Bank on the 27th of November came out with the final guidelines for the Bharat Bill Payment System (BBPS), which will help consumers pay multiple bills like electricity, telephone and school fees at a single point of transaction.

 Analysts say this is a good opportunity for mobile phone companies to add another revenue stream given their existing consumer connect.
 About 40 per cent of India's 1.2 billion people are unbanked but 80 per cent use a mobile phone. So, telecom operators would have a natural advantage in getting these people to its payment bank entities.
 On the other hand, large commercial banks might not be so enthused to come on board to form a joint venture with those raring to form payment banks. For, the picture is hazy about the benefits from such an association. There is also a cannibalisation risk.

【News source】

After record deal, more India bank takeovers on cards

RBI issues final norms for uniform payment collection system

RBI prohibits Airtel, Vodafone & Idea from using existing channels for payments banks business

Payment bank: Telcos seem attracted in the segment

Large banks may not be game stake in payment banks

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