Aditya Birla Nuvo Limited (ABNL), promoter and largest shareholder of Idea Cellular, Monday applied for Payments Bank licence with the Reserve Bank of India (RBI), a filing in the Bombay Stock Exchange by the companies said. “ABNL has Feb 2, 2015, submitted an application to the RBI for grant of licence for setting-up ‘Payments Bank’, in accordance with the Payments Bank guidelines in which process Idea (Cellular) is partnering with ABNL. ABNL would hold 51 percent equity in the Payments Bank, which is proposed to be registered as ‘Idea Payments Bank Limited’,” the statement said.
The RBI issued guidelines for licensing of payments bank Nov 27, 2014. The apex bank said the objectives of setting up of payments banks will be to further financial inclusion by providing small savings accounts and payments/remittance services to migrant labour workforce, low-income households, small businesses, other unorganised sector entities and other users.
This decision by ABNL and Idea Cellular has come within a few days of Bharti Airtel teaming up with Kotak Mahindra Bank to apply for Payments Bank. The Board of Directors of Idea has approved participation in the Payments Bank up to 49 percent under the automatic route and up to 60 percent or as permitted from time to time with approval of regulatory bodies as applicable, the statement said.
A wholly owned Idea subsidiary, Idea Mobile Commerce Services Limited (IMCSL), which is part of the promoter group, has a current authorisation from the RBI to issue Prepaid Payment Instruments (PPI Issuer). As per the Payments Bank Guidelines, a PPI Issuer cannot co-exist within the same promoter group. Hence, in case the Payments Bank licence is granted to ABNL, then the business carried on by the PPI Issuer will be folded into such Payments Bank. Idea Cellular’s shares were trading at Rs.153.45 or 0.71 percent down per share in the BSE at 1.55 p.m. (IANS)