The others that got the approval were Tech Mahindra, Dilip Sanghvi, Cholamandalam Distribution services, Reliance Industries and National Security Depository. They are yet to start their operations.
Aditya Birla has commenced operations for payments bank — Aditya Birla Idea Payments Bank. Aditya Birla group has now joined the likes of Airtel, Paytm, and India Post. The Reserve bank of India has issued a notice to the newly formed bank under section 22 (1) of the Banking Regulation Act to commence its operations in India. Furthermore, Aditya Birla Nuvo was one of the 11 applicants which were issued an approval for setting up a payments bank in 2015. Last year, media reports emerged stating that Aditya Birla group is planning to launch payment services through Aditya Birla Financial Services, a merger between Aditya Birla Nuvo and Grasim Industries.
Commenting on the mergers and approval from RBI, Sushil Agarwal, Group CFO Grasim Industries said, “The payments bank licence was issued to Aditya Birla Nuvo and Idea Cellular combine before the merger between Grasim and AB Nuvo was proposed. Now, as the merger has received almost all the approvals, the payments bank licence would be transferred to the newly formed entity Aditya Birla Financial Services.”
He further added that as Idea was merged with Vodafone, one of them will surrender its licence post-merger and tie-ups ABFS. The company claims to have a user base of 20 crore for telecom services. On the same, Sudhakar Ramasubramanian chief executive designate at Aditya Birla Idea Payments Bank, said, “We will also convert our 20 Cr retailer base across the country into banking touchpoints to take financial services to the rural areas.”
Payments bank differ from usual banks as they’re not allowed to issue credit cards or provide loan to customers. They can only accept deposits upto 1 lakh INR per individual and can offer current/savings account to them. These payment companies can further provide debit cards and offer internet banking.
Leaving aside the current payments bank, Reliance Industries and SBI have entered into a 70-30 partnership to enable ‘Jio Payments Bank’ later this year.