Aditya Birla Nuvo, Kishore Biyani’s Future Group apply for payments bank licence

By: and | Updated: February 2, 2015 4:03 PM

Aditya Birla Nuvo and Future Group are among the first big names to apply for licences to run payments banks...

Kumar Mangalam Birla, Aditya Birla NuvoKumar Mangalam Birla-led Aditya Birla Nuvo has submitted an application to the Reserve Bank of India for obtaining licence for setting-up Payments Bank

Diversified firm Aditya Birla Nuvo Ltd and retailer Future Group were among the first big names to apply for licences to run payments banks, under rules meant to put basic banking within the reach of hundreds of millions.

Monday is the deadline for applications to run payments banks – which cannot lend – but also for permits to run small finance banks.

“Aditya Birla Nuvo on February 02, 2015, submitted an application to the Reserve Bank of India for obtaining licence for setting-up Payments Bank,” the company said in a BSE filing.

As per the proposed structure, ABNL will be the promoter of Payments Bank holding 51 per cent equity capital. Idea Cellular Ltd, an Aditya Birla Group company where ABNL is largest promoter shareholder, will be hold the balance 49 per cent.

The company added that “the Board of Directors of ABNL has also approved that equity participation of Idea may be increased up to 60 per cent, if permitted, from time to time with approval of regulatory bodies as applicable.”

Kishore Biyani-led Future Group, one of India’s biggest retailers, also said it had applied on Monday for a payments bank permit.

As per RBI guidelines on Payments Bank, they can raise deposits of up to Rs 1 lakh per individual, issue ATM/debit cards and sell simple financial products such as mutual funds and insurance products.

Dozens of companies are expected to bid, as the country hopes networks of mobile phone vendors, fuel stations and corner stores can extend the reach of the banking system. Top Indian telecommunications carrier Bharti Airtel Ltd has also said it would apply.

Payment Banks would be allowed payments and remittance services through various channels.

However, Payments Banks, cannot issue credit cards or undertake lending activities.

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