Aditya Birla Nuvo has received the final approval from the Reserve Bank of India (RBI) to launch a payments bank in India.
The new entity, named Aditya Birla Idea Payments Bank, is a joint venture between Aditya Birla Nuvo and telecom provider Idea Cellular. Aditya Birla Nuvo will hold a 51% stake in the payments bank, while Idea Cellular will own a 49% stake.
Aditya Birla Nuvo was among the 11 entities that secured in-principle nod in August 2015 for setting up payment banks.
The others included Reliance Industries, Airtel M Commerce Services, Vodafone m-pesa, Tech Mahindra, Cholamandalam Distribution Services, Department of Posts, Fino PayTech, National Securities Depository, Shri Dilip Shantilal Shanghvi, and Shri Vijay Shekhar Sharma.
However, Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services later backed out of the plan.
The other payments bank licence holders so far include Airtel M Commerce Services, India Post, Paytm, Fino PayTech, and National Securities Depository.
Payment banks are allowed to take deposits, offer internet banking, support fund transfers, sell insurance and mutual funds, and issue ATM/debit cards. However, they will be restricted from from issuing credit cards and lending to customers.