The Reserve Bank of India (RBI) on Wednesday granted 'in-principle' approval to the 11 applicants to set up payments banks. Department of Posts, Airtel M Commerce Services, Reliance Industries, Vodafone m-pesa, Aditya Birla Nuvo, Tech Mahindra, Cholamandalam Distribution Services, Fino PayTech, National Securities Depository, Dilip Shantilal Shanghvi and Vijay Shekhar Sharma secured the approval for setting up payments banks.
A payments bank is a type of non-full service niche bank. A firm licensed as a payments bank can only receive deposits and provide remittances. It cannot carry out lending activities. Payments bank was created to reach financial inclusion targets.
Commenting on the issuance of payments bank license, Sunil Sood, MD & 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.''
Vellayan Subbiah, MD of Cholamandalam Investment and Finance Company said, ''We would like to thank RBI for giving us the opportunity to operate Payment Banking services in the country; this is a transformative step in fulfilling the financial inclusion goal of the Government of India and RBI. Chola currently has over 534 branches spread across the country and a captive base of over 7.5 lac customers, which is an immediate opportunity that can be tapped into. The larger Murugappa group eco-system offers an even larger base of rural customers and this is a definite plus for us. We will take a solution to the market which will use both technology and our physical footprint. This will help in digitizing cash transactions and providing additional services to existing and new customers of the payment bank. Our focus will predominantly be on financial inclusion and on the MSME sector.''
Arundhati Bhattacharya, Chairman, SBI, said, ''We are pleased to note that RBI has granted payment bank license to Reliance Industries in which SBI has proposed a 30 percent stake. This partnership brings together the combined strengths of two of India's Fortune 500 corporations committed to making a transformative impact on India's financial inclusion landscape. We see this license as an opportunity to promote financial inclusion by providing banking and transaction services to unbanked, under- banked and small businesses.''
Dipak Gupta, joint managing director, Kotak Mahindra Bank, said, ''We are delighted that Airtel M Commerce Services, where we have agreed to invest 19.9%, has received in-principle approval from Reserve Bank of India for setting up a Payment Bank. Payment Banks will play a crucial role in fulfilling India’s financial inclusion agenda, and have the potential to change the paradigms of retail banking especially in the payments space. They will also promote the habit of savings by driving cashless transactions. We are truly excited to participate in this opportunity.''
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