The Reserve Bank of India (RBI) granted in-principle nod to 11 payment banks applicants. The RBI had received 41 applications for payments banks The central bank has approved applications of National Securities Depository Limited (NSDL), Reliance Industries , Aditya Birla Nuvo , Airtel M Commerce among others.A payment banks differs from conventional banks as it cannot lend to its customers. It is allowed to take deposits, allow remittances and provide simple financial products.The payment bank will need to invest 75 percent of its funds in government securities.
The minimum capital needed to set up a payments bank is set at Rs 100 crore. The bank will be allowed to accept savings deposits of up to Rs 1 lakh from each customer.
Names of other applicants that have received nods: -
Department of Posts
Cholamandalam Distribution Services
PayTM's Vijay Shekhar Sharma
Sun Pharma 's Dilip Shanghvi.
The RBI's â€œin-principleâ€� approval will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the central bank. Rishi Gupta of Fino PayTech, the payment company backed by ICICI Bank , says he hopes to comply with the RBI prerequisites in 10-12 months. While the company already exists in 400 districts across India, Gupta says this business will allow it to go deeper into the geographies of the country and hopes to break-even by 3 years. CP Gurnani of Tech Mahindra says the company doesn't need 18 months and is ready to start its payment bank business today itself. Gurnani says the company will tie up with Mahindra Finance to tap rural network.
Furthermore, Dilip Sanghvi, the promoter of Indian pharma major Sun Pharma, who is one of the persons shortlisted for a payment bank licence told CNBC-TV18 he is looking to tie up with telecom company Telenor to launch the payments bank service. While only 26 percent of the companies that had applied were granted the nods in this round, the RBI has kept the door open for other approvals. "Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the Guidelines and move to giving licences more regularly, that is, virtually â€œon tapâ€�. The Reserve Bank believes that some of the entities who did not qualify in this round, could well be successful in future rounds," the RBI statement said.