Chennai/New Delhi, Aug 19 (IANS): The Reserve Bank of India (RBI) on Wednesday granted 'in principle' approval to 11 applicants, including Reliance Industries Ltd., Aditya Birla Nuvo Ltd., Department of Posts and Cholamandalam Distribtuion Services Ltd., to set up payment banks.
The others who got the approval are Airtel M Commerce Services Limited, Fino PayTech Limited, National Securities Depository Limited, Dilip Shantilal Shanghvi, Vijay Shekhar Sharma, Tech Mahindra Limited and Vodafone m-pesa Limited.
Indian corporate giant Reliance Industries has roped in banking giant State Bank of India (SBI) as an active equity partner with 30 percent stake in the payment bank venture.
According to RBI, the in-principle approval will be valid for 18 months, during which the applicants have to comply with guidelines and fulfil other conditions as may be stipulated by it.
The RBI, on being satisfied that the conditions laid down have been met by the applicants, would then consider granting them a licence for commencement of banking business.
Until regular licences are issued, the applicants cannot undertake any banking business.
Reacting to RBI's decision, Vodafone India's managing director and CEO Sunil Sood said: "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."
In a statement, he said Vodafone India had partnered several government bodies to run pilots for enabling direct transfer of wages/subsidies.
"The payment bank licence will enable us to further build on this and offer a more comprehensive portfolio of banking and financial products and services, accelerating India's journey into a cashless economy," Sood said.
The payment banks will cater to the needs of small savings accounts, remittance services, low income households, small businesses and other unorganised sector entities.
The Reserve Bank of India had invited individuals, non-banking finance companies (NBFCs), corporate business correspondents (BCs), mobile phone companies, supermarket chains and real sector cooperatives to apply for licences to set up payments banks.
The RBI said those with existing joint venture (JV) with a scheduled commercial banks can set up payment bank.
The guidelines said the objective of setting up the small finance banks will be for further financial inclusion by providing savings facilities and supply of credit to small business units, small and marginal farmers, micro and small industries, and other unorganised sector entities, through 'high technology, low cost' operations.
"We are confident that this move will play a pivotal role in bringing millions of unbanked Indians into the folds of banking," said a spokesperson for Airtel.