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.