With differentiated banks such as small finance banks (SFBs) and payments banks (PBs) commencing operations in 2016-17, the Reserve Bank has started exploring the scope of setting up wholesale and long-term finance (WLTF) banks focused primarily on lending to infrastructure sector and small, medium and corporate businesses. The Discussion Paper of April 2017 envisions the role for WLTF banks to include mobilising liquidity for banks and financial institutions through securitisation, acting as market makers, providing refinance to lending institutions, and operating in capital markets as aggregators. The envisioned heterogeneous banking structure will complement and compete with universal banking institutions and enhance financial inclusion while meeting the diverse credit needs of a growing economy.
