Airtel, Vodafone, RIL get RBI nod for payment banks

RBI

Airtel M Commerce Services, Tech Mahindra, Vodafone m-pesa, Reliance Industries (RIL), Aditya Birla Nuvo, Department of Posts, Cholamandalam Distribtuion Services, Fino PayTech, National Securities Depository, Dilip Shantilal Shanghvi and Vijay Shekhar Sharma have received in principle approval to set up payment banks from the Reserve Bank of India (RBI).

Mukesh Ambani-promoted Reliance Industries has tied up with State Bank of India (SBI) as an active equity partner with 30 percent stake in the payment bank venture.

According to RBI, the in-principle approval will be valid for 18 months, during which the applicants have to comply with guidelines and meet other conditions as may be stipulated by it.

The RBI, on being satisfied that the conditions laid down have been met by the applicants, would then consider granting them a license for commencement of banking business. Until regular licenses are issued, the applicants cannot undertake any banking business.

Vodafone India’s managing director and CEO Sunil Sood said: “With over 90,000 M-Pesa agents, we are providing people in remote areas a convenient way to transfer money and make payments in a safe and secure manner.”

He said Vodafone India had partnered several government bodies to run pilots for enabling direct transfer of wages/subsidies.

“The payment bank licence will enable us to further build on this and offer a more comprehensive portfolio of banking and financial products and services, accelerating India’s journey into a cashless economy,” Sood said.

The payment banks will cater to the needs of small savings accounts, remittance services, low income households, small businesses and other unorganized sector entities.

The RBI guidelines said the objective of setting up the small finance banks will be for further financial inclusion by providing savings facilities and supply of credit to small business units, small and marginal farmers, micro and small industries, and other unorganized sector entities, through ‘high technology, low cost’ operations.

“We are confident that this move will play a pivotal role in bringing millions of unbanked Indians into the folds of banking,” said a spokesperson for Bharti Airtel.

Communications and IT Minister Ravi Shankar Prasad said it was a proud moment for the Department of Posts to be granted in principle approval by the Reserve Bank of India for starting a payments bank.

“I am very happy to learn that the postal department has been given a payment banking permission by the RBI. I thank the RBI governor and his team. This is a very proud moment for the Postal Department,” the minister said.

Amdocs said it has a successful track record of over 14 years working with service providers and financial institutions in developing and emerging markets. Amdocs can enable India to leapfrog into the mobile banking era.

Amdocs has over 50 global implementations and served 650 million users, experiencing over 16 billion transactions. It has been the pioneer in mobile financial services and also launched the world’s first digital wallet in 2004 with Globe GCash.

Baburajan K
[email protected]

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