Idea Cellular Gets Set To Take On Airtel With Its Own Payments Bank

Aditya Birla Nuvo Ltd. has got the final nod from the Reserve Bank of India (RBI) to start a payments bank in India, the company said in a stock exchange filing on Tuesday.

Aditya Birla Idea Payments Bank Ltd. a joint venture between two Aditya Birla Group companies—Aditya Birla Nuvo and Idea Cellular Ltd.—is among six companies to get a final approval from the banking regulator. Airtel Payments Bank Ltd. was the first such payments lender to launch commercial operations in January, followed by India Post. The latest player to start operations is Paytm. Fino PayTech and National Securities Depository Ltd. (NSDL) are two other companies to have got a final nod from the banking regulator to begin operations.

Payments banks are allowed to accept deposits and open current and savings accounts, but are restricted from issuing loans or credit cards. The government’s thrust on digital payments is also expected to provide an impetus for growth to these new payment platforms. Like Airtel Payments Bank, the Aditya Birla Idea Payments Bank will look to target Idea Cellular’s existing subscriber base to grow.

Three other organisations have ‘in-principle’ licences from the RBI, including Reliance Industries Ltd. and Vodafone M-Pesa.

Tech Mahindra Ltd., Sun Pharmaceuticals Ltd. promoter Dilip Shanghvi, and Cholamandalam Distribution Services Ltd. have opted out since getting a similar approval in August 2015.

The country's nodal security depository NSDL hopes to launch its payments bank by May.

(Corrects an earlier version that said Fino PayTech And NSDL are awaiting final approval)