Bharti Airtel's payments bank venture — Airtel M Commerce Services Ltd. — has become the first entity to receive final approval from the Reserve Bank of India (RBI) to start a payments bank.
Airtel M Commerce, a subsidiary of Bharti Airtel, was granted the licence on Monday, the telecom company informed stock exchanges.
In August last year, the banking regulator granted in-principle licences to 11 entities to start payments banks. One of them — Cholamandalam Distribution Services Ltd. — decided not to go ahead with the venture.
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The ‘in-principle’ approval was valid for 18 months, during which time the applicants were asked by RBI to comply with the licensing norms.
Most of the players who received the payments licences are yet to apply for the final licences.
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Some of the other players that have received such differentiated licences are Vodaphone m-pesa, Tech Mahindra, Reliance Industries, Vijay Shekhar Sharma, founder of the mobile wallet Paytm, and Fino Pay Tech, among others.
Private sector lender Kotak Mahindra Bank has picked up 19.9 per cent stake in Airtel M Commerce.
The payments banks are not allowed to lend. Hence, a tie-up with banks will help them source loans for their customers.