New Delhi, Jan 29 (IANS) Bharti Airtel Limited’s wholly-owned subsidiary Airtel M Commerce Services Limited (AMSL) is seeking to convert its existing Prepaid Payment Instrument licence into a Payments Bank licence to be issued by the Reserve Bank of India, a company statement said Thursday.
AMSL, which offers mobile money services under the brand name Airtel Money, was launched in 2011.
It also announced that subject to grant of a Payments Bank licence to AMSL by the RBI and all regulatory approvals, Kotak Mahindra Bank Limited will acquire 19.90 percent stake in AMSL as an investor.
Payments bank licence is issued by the Reserve Bank of India (RBI) – the apex bank of the country.
Kotak Mahindra Bank Limited has agreed, subject to regulatory approvals, to invest 19.90 percent in AMSL, a statement by the company said.
“We welcome the Reserve Bank of India’s (RBI) initiative on Payments Bank. The RBI’s vision for differentiated banks represents a significant step in furthering India’s financial inclusion agenda. The RBI guidelines provide an exciting and challenging opportunity for an entity like us to contribute in a meaningful manner to drive financial inclusion,” Gopal Vittal, managing director and chief executive officer (India and South Asia), Bharti Airtel said.
Regarding the tie-up with Kotak, he added: “Kotak Mahindra Bank Limited is one of the leading and most respected private sector banks in Ind’a. Kotak’s banking expertise coupled with Airtel’s strength in telecom will help deliver financial services to millions of unbanked citizens across the country.”
“Payment banks have the potential to leapfrog India’s financial inclusion agenda. Basic but critical services such as small savings accounts, remittances, etc. will bring a large number of low income households and small businesses under the formal banking network,” Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank Limited said.
On the investment in AMSL, Gupta added: “Bharti Airtel has the technology and physical infrastructure, a well-entrenched distribution network in rural and remote areas of the country and has the largest telecom customer base, coupled with our banking expertise, this clearly is a win-win for both.”
Airtel is the largest mobile services provider in India with over 215 million subscribers and with 31 percent revenue market share. Airtel has deep and wide distribution reach especially in rural and remote parts of the country. Its distribution network reaches over 1.4 million retail points across India.
Kotak’s statement said AMSL is in the process of applying for Payment Bank Licence to the RBI.