India’s state-run oil marketing company Bharat Petroleum Corporation Limited (BPCL) has acquired a 21% stake in Fino Paytech, which secured a licence from the Reserve Bank of India (RBI) last year to launch a payments bank.
BPCL purchased the stake in an all-cash deal valued at nearly $37.6m.
The partnership between the two companies would help develop a payments ecosystem for BPCL customers and fleet operators by utilising each other’s capabilities, Fino Paytech said in a statement.
“BPCL is in the process of rolling out various customer service initiatives in its core retail fuels business using the emerging technology solutions. This investment provides an excellent base for supporting and strengthening these initiatives,” BPCL spokesperson stated.
The deal is anticipated to be wrapped up by 31 December 2016.
FINO PayTech CEO and MD Rishi Gupta said: “We are happy and proud to have BPCL as an investor and strategic partner for our Payments Bank foray. Leveraging the existing synergies will strategically benefit and fuel growth for both FINO and BPCL.
“The extensive reach of BPCL distribution allows FINO Payments Bank to substantially improve its reach, especially in rural India. On the other hand, BPCL will be able to offer variety of payments bank products to its customers and partners. Our collective experience will go a long way in building a strong institution.”
Fino Paytech was among the 11 applicants that secured in-principle approval from RBI in August 2015 for payments bank.
Payment banks are allowed to take deposits, offer internet banking, support fund transfers, and sell insurance and mutual funds. Howevre, are barred from issuing credit cards and lending to customers.