Aditya Birla Group gets RBI nod to kick off payments bank

The Dollar Business Bureau

Aditya Birla Group on Tuesday announced it has received the banking license from the Reserve Bank of India (RBI) to operate its joint venture Aditya Birla Idea Payments Bank Ltd.

Kumar Mangalam Birla-led outfit Aditya Birla Nuvo had earlier set up a joint venture with the other telecom major Idea Cellular to start payments bank services in the country. Aditya Birla Nuvo and Idea Cellular will hold 51:49 shares in the joint venture payment bank.

"... the Reserve Bank of India... has granted a licence to Aditya Birla Idea Payments Bank Ltd to carry on the business of payments bank in India," Aditya Birla Nuvo said in a statement.

Earlier last year, Airtel and India Post had formed a joint venture to offer payments bank services in the country.

Idea Cellular Chief Corporate Affairs Officer Rajat Mukarji said the Aditya Birla Idea Payments Bank will be unveiled in the first half of 2017.

The RBI launched a drive to deepening financial inclusion in the country, by authorising small finance banks (SFBs) and payments banks (PBs) to initiate financial services. So far, it has given in-principle nod to a total of 21 entities, which includes 11 for payments banks.

Three entities - Tech Mahindra, Cholamandalam Investment and Finance Company, and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services – abandoned the payments bank licensing.

According to the RBI guidelines, payments banks can accept cash deposits from small businesses and individuals up to Rs.1 lakh per account.