Last year, the central bank had given an in-principle nod to 11 entities to set up a payments' bank, including Reliance Industries, India Post, Vodafone m-Pesa.
Bharti Airtel's mobile commerce subsidiary Airtel M Commerce Services Ltd (AMSL) has become the first to be issued payment bank licence by the Reserve Bank of India (RBI) on Monday.
Last year the RBI had granted an in-principle approval to 11 applicants including Tech Mahindra, Reliance Industries, Aditya Birla Nuvo, Indian Post, Vodfone m-pesa and others for setting up a payments bank.
"Pursuant to Regulation 30 of Listing Regulation, we are pleased to inform you that Airtel M Commerce Services Ltd (AMSL), a subsidiary of Bharti Airtel has been granted payments bank license from Reserve Bank of India on April 11, 2016," said the telecom major in its statement to the National Stock Exchange of India.
AMSL, which offers mobile money services under the brand name Airtel Money, will convert the existing pre-paid payment instrument (PPI) licence into a payments bank licence, as per the guidelines prescribed by the central bank. It has formed a joint venture with Kotak Mahindra Bank Ltd, which has come in as an investor.
Payments banks will be offering differentiated services to small savings accounts, remittance services, low income households, small businesses and other unorganised sector entities. These banks will be improving the financial inclusion in the country by getting the unbanked into the banking system.
Talking on the opportunity in the payments bank segment, Hemant M Joshi, partner, Deloitte Haskins & Sells LLP, said; "Payments bank is a big opportunity. Technology will be driving convergence of industries. With this convergence between telcos (telecom companies) and the financial services, we are on a cusp of a major revolution primarily driven by mobile and payment banks. We are in for very exciting times".
Another aspirant, Tech Mahindra that was shortlisted by RBI had told dna that it was expecting to launch its payments bank in the third quarter of the current fiscal. Its bank will be run as a joint venture with its NBFC arm of the Mahindra Group, Mahindra Finance.
All the other players in the segment are also expecting to launch their payment banks in the current fiscal.
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