Bharti Airtel plans for Indian payment bank licence

India’s largest cellular operator Bharti Airtel is planning to take advantage of the Reserve Bank’s financial inclusion plans by applying for a payment bank licence.

Bharti said on Thursday that its mobile payments company, Airtel M Commerce Services Ltd., is planning to convert its existing payment instrument licence into a payments bank permit.

The Reserve Bank of India started a call for applications in November for two new types of banks that would help bring the hundreds of millions of Indians without bank accounts into the formal financial system. Payment banks are intended to provide small savings accounts as well as remittance services to more remote areas of the country, taking advantage of telcom company networks to extend the reach of India’s financial services.

Mumbai-based Kotak Mahindra Bank plans to buy a 19.9 per cent stake in the company once the payments bank licence is granted, The Wall Street Journal reported.

All applications for new banks must be made to the RBI by February 2nd. Vodafone and Norwegian company Telenor are expected to apply, but are searching for local partners as foreign companies are only allowed a 74 per cent ownership of companies on Indian soil.

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