Niti Aayog bats for full-stack digital banks

Digital banks will be subject to prudential and liquidity norms at par with the incumbent commercial banks, Niti Aayog said in a discussion paper

Government think-tank Niti Aayog on Wednesday proposed setting up of full-stack ‘digital banks’, which would principally rely on the Internet and other proximate channels to offer their services and not physical branches, to mitigate the financial deepening challenges being faced in the country.

“In other words, these entities will issue deposits, make loans and offer the full suite of services that the Banking Regulation Act empowers them to. As the name suggests, however, DBs will principally rely on the Internet and other proximate channels to offer their services,” it said in a discussion paper.

However, the paper said as a natural corollary to being a bank in full sense of its legal definition, it is proposed that DBs will be subject to prudential and liquidity norms at par with the incumbent commercial banks.