Reliance Industries Ltd (RIL), Aditya Birla Nuvo Ltd and Kishore Biyani’s Future Group have sought permission from the Reserve Bank of India (RBI) to set up payments banks.
Monday was the last day to submit applications to the RBI. Bharti Airtel was the first business house to announce its payments bank plan with Kotak Mahindra as a partner last Thursday.
RIL on Monday said it will partner with State Bank of India to float a payment bank. It will be the promoter and SBI will be the joint venture partner with equity investment of up to 30 per cent. “The payments bank will leverage SBI’s nationwide distribution network and risk management capabilities alongwith the substantial investments made by RIL in its retail and telecom businesses,” RIL said in a statement.
RBI rules say that payment banks would not be allowed to undertake lending activities. The proposed niche banking entities will initially be restricted to holding a maximum balance of Rs 1 lakh per individual customer. They will be allowed to issue ATM/debit cards as also other prepaid payment instruments, but not the credit cards. While the RBI will do the initial screening, an expert panel of outsiders will vet the applications and submit the list of eligible applicants to the RBI.
The Future group said the proposed bank will be a separate company under the group. “The group proposes, subject to the grant of the licence and other regulatory approvals, to name the entity, NuFuture Payments Bank,” the firm said in a statement.
Meanwhile, Aditya Birla Nuvo said that the company, “…on February 2 submitted an application to the RBI for obtaining licence for setting-up Payments Bank.” ABNL will be the promoter of the payments bank holding 51 per cent equity capital. Idea Cellular Ltd, an Aditya Birla Group firm where ABNL is largest shareholder, will hold the balance 49 per cent.