RBI Grants Payments Bank License To Airtel M-Commerce
Bharti Airtel on Monday announced that its subsidiary Airtel M Commerce Services Limited (AMSL) has been granted payments bank license from Reserve Bank of India (RBI).
The company in January last year has filed an application for the payments bank license with the RBI, and had gotten Kotak Mahindra Bank Limited (Kotak) as an investor.
“Pursuant to Regulation 30 of Listing Regulation, we are pleased to inform you that AMSL, a subsidiary of Bharti Airtel Limited has been granted payments bank license from RBI on April 11, 2016,” the company said in a filing to BSE.
According to the agreements last year, Kotak had picked up 19.90 per cent stake in AMSL, which amounts to around ₹98.38 crore (9.83 crore equity shares).
AMSL is a wholly owned subsidiary of Airtel which offers mobile money services under the brand name ‘Airtel Money’ which proposes to convert the existing pre-paid payment instrument license into a Payments Bank license as per the guidelines prescribed by the RBI.
Payments Banks will initially be restricted to holding a maximum balance of Rs 1 lakh per individual customer. They will be allowed to issue ATM/debit cards as also other prepaid payment instruments, but not the credit cards.
According to the PTI report, these banks can also distribute non-risk sharing simple financial products like mutual funds and insurance products. They will not be allowed to undertake lending services and non resident Indians will not be allowed to open accounts.
Airtel Money, launched in 2011 was the first mobile based pre-paid payment instrument service in the country which today empowers millions across India to leverage their mobile phones as a secure way for making payments and transferring money.
The company through Airtel Money, offers ticketing, mobile and DTH recharges, utility bill payments, online shopping, money transfer services. It also has business correspondent tie-up with Axis Bank and provides business to business payment collection services at present.
AMSL was one of the 11 entities, including Aditya Birla Nuvo, Department of Posts, Reliance Industries, Tech Mahindra and Vodafone m-pesa, which were granted approval in August 2015 by the RBI for setting up payments banks.
(With inputs from agencies)
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