NEW DELHI: The country’s apex bank RBI has given in-principle approval to 11 companies, including top telecom operators–Bharti Airtel, Vodafone and Idea, for setting up payments banks for three years.
The companies will be handed licenses if they fulfill all conditions listed by the RBI after a period of 18 months.
The other applicants includes Reliance Industries, Department of Posts, Cholamandalam Distribution Services, Tech Mahindra, National Securities Depository Limited (NSDL), Fino PayTech, Sun Pharma’s Dilip Shantilal Shanghvi and PayTM.
Around 41 companies had applied for the payment bank licenses. RBI said,” some of the entities who did not qualify in this round, could well be successful in future rounds.”
Payments banks can accept deposits and remittances but can’t offer loans.
Sunil Sood, MD and CEO, Vodafone India, said: “We are grateful to the RBI for giving us the licence for setting up a payment bank. With over 90,000 ‘M-Pesa’ agents, we are already providing people in remote areas a convenient way to, transfer money and make payments in a safe and secure manner. We have partnered with several government bodies to run pilots for enabling direct transfer of wages/subsidies. The payment bank licence will enable us to build on this further and offer a more comprehensive portfolio of banking and financial products and services, accelerating India’s journey into a cashless economy.”
“We remain committed to actualize the government’s vision of financial inclusion by leveraging the reach of mobile technology to service the unbanked and underserviced sections of the society.”
T V Ramachandran, Chairman of ASSOCHAM Telecom Council, said: “Mobile operators, in this extremely competitive market, need to continuously explore ways in which they can not only expand customer base but also increase the so-called ‘stickiness’ of existing subscribers. Being a payment bank not only brings in an important value-add, but also, more importantly, enhances the stature and reputation of the company as a trustworthy player. Hence, the branching of telcos into payment bank role is a very logical extension in their growth plans and not a dilution of their telecom interests.”
“As revenue generation areas are growing lesser for Indian telcos, there is a pressure to manage scalability. OTT services/apps such as WhatsApp/Skype are furthering shrinking revenue margins for Indian telcos, therefore there it is imperative to work on revenue generation models that are not limited to just voice and data services. The time is opportune as India witnesses the eCommerce/mCommerce wave – there is a paucity of secure payment channels and telcos must leverage this opportunity to create a secure transaction channels for the Indian masses,” said Sanchit Vir Gogia, Founder, GreyHound Research.