These are banks that will cater to smaller customers across the country. The detailed guidelines will also be put out," RBI Governor Raghuram Rajan said.

He was speaking at the 10th IDRBT Banking Technology Excellence Awards here.

Referring to payment banks, he said they should tie-up with regular commercial banks to offer different services. "My hope is that by licencing payment banks, we would also further cause of bank payments, bank alliances."

Highlighting that technology has an important role to play in financial inclusion, he said certain 'Ps', including Products, Price and Protection summarise the aspects which need to be pondered over by bankers.

In this context, he said Products that are shaped to the needs of individuals, without taxing their understanding are needed.

The RBI has put out a consumer code which puts the onus on banks to determine what is suitable for individuals, Rajan said.

"Of course, that's a harder task than just selling the product to the individual. We have to find out what the individual understands, what the needs are, etc."

Technology may help in understanding customer profiles better and to inform the customer better, the Governor said.

Recalling that RBI has made efforts to reach out to customers in remote areas, Rajan said that communications technology and alliances between banks and mobile companies would help in the task.

Stressing the importance of price with regard, he said "affordable excellence" that envisages good, simple and affordable products, is absolutely needed.

"I think technology is critical to affordability," he said, adding that technology and information would help in understanding the way a customer handles the bank account.

Citing the example of 'Pradhan Mantri Jan Dhan Yojana' in this regard, he said technology helps in monitoring how the individual uses the direct benefit payments.

Talking about customer protection as another important aspect, Rajan said that product should be suitable and appropriate to the customer.

In addition to the customer protection, he said customer literacy is also important for making people to understand financial matters like interest rate.

Noting that a grievance redressal process is also needed, the RBI governor said that technology helps in addressing the grievances at a low cost.

Referring to bio-metric technology used in the IDRBT to establish the identity of individuals, he said the biometric technology can help in making transactions with bank cards relatively safe.

"It (biometric) is a technology we need figure out how to roll it out in rest of India. Because, think of it. The problem today, If I just give a card to an individual, somebody else can take the card," he said.

Some individuals may find it difficult it to understand that they need to key in the PIN number themselves, he said.

"Information and analytics are important for bringing small and medium firms into financial ambit as well and low transaction cost is key to make access to finance more easily available to them," Rajan said.

Regulations also need to be adapted in tune with the changes in technology and RBI has been at the vanguard of technology, he said.

On the negative side of technology, Rajan touched upon the Nigerian frauds to drive home the point that cyber security is also equally important.

He cited the example of JP Morgan reportedly losing a large number of accounts due to hacking as a case in point.

"We have to be aware that technology brings both good and bad. We have to guard against the bad side of technology. That means, we need institutions like IDRBT to think of defence," he added.

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