Bharti Airtel seeks Indian payments bank license

Bharti Airtel seeks Indian payments bank license

Indian telco Bharti Airtel says that it will apply for a payments bank license as it prepares to make a grab for the country's huge underexploited mobile banking market.

The new type of license, established by the Reserve Bank of India last year to encourage competition in the banking sector, would let Bharti offer services like remittances and deposits, although it could not lend money.

If the application is successful, Bharti will sell a 19.9% stake in its Airtel M Commerce Services unit to Kotak Mahindra Bank.

Gopal Vittal, CEO, Indian operations, Bharti Airtel, says: "Kotak’s banking expertise coupled with Airtel’s strength in telecom will help deliver financial services to millions of unbanked citizens across the country."

The payment bank licences are just one way that the government is hoping to encourage take up and spread financial inclusion. India has around 870 million mobile subscribers and 450 million bank account holders yet just 22 million active m-banking customers, according to figure published by the country's central bank last year.

Comments: (2)

A Finextra member
A Finextra member 30 January, 2015, 09:471 like 1 like

The use of mobile payments in South Africa and India is a stunning example of the potential of mobile payments to reach the underbanked population. Regulators and governments in Europe take note there is still a large unbanked population to be served in first world countries.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 30 January, 2015, 13:11Be the first to give this comment the thumbs up 0 likes

@Anon: Under a recent drive launched by the government of India, more than 120M people were able to open regular bank accounts with fairly "lightbrush" KYC. On the other hand, opening a mobile money account via Airtel or Vodafone is quite painful, as I'd highlighted in this post: http://www.finextra.com/blogs/fullblog.aspx?blogid=9273. Therefore, even if you don't share my overall skepticism about "banking the unbanked" (http://www.finextra.com/blogs/fullblog.aspx?blogid=9777), the notion that mobile payments can reach the underbanked is a myth - at least as of the present regulatory framework in India.

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