##ciers. it is expected that the treds will commence operations within this current fiscal. 3 / 5 bis central bankers'speeches ( ii ) an udyami mitra portal has been set up to leverage it architecture of stand - up mitra portal which aims at instilling ease of access to msmes ’ financial and non - financial service needs. the portal, as a virtual market place endeavours to provide ‘ end to end ’ solutions not only for credit delivery but also for the host of credit - plus services by way of hand holding support, application tracking, multiple interface with stakeholders ( i. e. banks, service providers, applicants ). ( 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. let me utilise the presence of the bank ceos and in - charges of msme divisions to draw their attention to the need for focussing separately on ‘ micro ’ customers from amongst the msme segment. micro entities comprise a very ‘ niche ’ segment as these are mostly individual or family run businesses having very unique credit needs. as they generally lack adequate documentation, they fail to receive credit from the formal financial system. an estimate suggests that at present almost 93 % of such units are outside the formal credit system. i think this segment, including the small enterprises, can benefit immensely from the collaboration between banks and the fintech players whereby their other payment records can form a basis for working their credit worthiness. 17. a related aspect i want to highlight is that the smaller players in the msme segment typically dealt in cash despite having a bank account. thanks however to the withdrawal of the sbns recently, most of them have begun to route their transactions through their bank accounts. it opens up a huge opportunity for the banks to employ data mining techniques and utilize the outcomes to assess credit needs of the small entrepreneurs. needless to add that such exercise has to be

aggregate, 627 authorisations were issued during the year for opening of rural branches and 1471 branches in the semi - urban areas. i would like to emphasise that the new branch authorisation policy does not preclude the possibility of any urgent proposals for opening bank branches being considered by the rbi even outside the annual plan, specially in the rural / under - banked areas, anytime during the year. 15. in brief, rbi has been discharging the mandate given to it for branch licensing as required by law, public policy and regulatory comforts. let me add that under the new policy, all the branch - authorisation requests of the banks were granted by rbi, subject to the banks fulfilling the criteria laid down for opening of branches in under - banked areas, except in the case of a few banks where there were serious regulatory discomfort on account of their indiscretions and contravention of the regulatory norms. it is interesting to note in this context that in the usa, for instance, for lesser regulatory violations, the banks are subjected to " cease and desist " order from the regulator, severely restricting their activities during the currency of the order. ( d ) merger between a private sector bank and an nbfc 16. as i mentioned earlier, the reserve bank is vested with the discretionary powers to approve the voluntary amalgamation of two banking companies under the provisions of section 44 - a of the banking regulation act, 1949. however, these powers do not extend to the voluntary amalgamation of a non - banking company with a banking company where amalgamations were governed by sections 391 to 394 of the companies act, 1956 in terms of which, the scheme of amalgamation has to be approved by the high court. hence, the banks were advised in june 2004 that where an nbfc is proposed to be amalgamated with a banking company, the banking company should obtain the approval of the reserve bank after the scheme of amalgamation is approved by its board but before it is submitted to the high court for approval. 17. subsequently, in pursuance of the recommendations of the joint parliamentary committee ( jpc ), a working group was constituted by rbi to evolve guidelines for voluntary merger of banking companies. based on the recommendations of the group and in consultation with the government, it was proposed in the annual policy statement of april 2005 to issue guidelines on merger and amalgamation between private sector banks and with nbfcs. the guidelines were to cover : process of merger proposal, determination