RIL, Aditya Birla, Future Group apply for payments bank licences (Roundup)

A few top Indian companies including Reliance Industries Ltd., Aditya Birla Nuvo Limited and Future Group Monday applied to the Reserve Bank of India (RBI) for payments bank licences.

Reliance Industries has roped in the State Bank of India (SBI) as an active equity partner as it seeks a licence to extend affordable banking and payments solutions in the country assisted with access to 15,869 branches and vast network of India's largest commercial bank.

Aditya Birla Nuvo Limited (ABNL), promoter and largest shareholder of Idea Cellular, also applied for Payments Bank licence with the RBI, a filing in the Bombay Stock Exchange by the companies said.

The Kishore Biyani-led Future Group also Monday applied for a payments bank licence with the RBI, the banking entity would be called NuFuture Payments Bank.

Last week, Bharti Airtel announced it was teaming up with Kotak Mahindra Bank to apply for payments bank.

The RBI issued guidelines for licensing of payments bank Nov 27, 2014. The apex bank earlier extended the last of submission of applications for licence of payments banks to Feb 2.

A payments bank, as defined by the Reserve Bank's draft rules, can accept deposits, both savings and current, up to a maximum of Rs.10,000 initially, with the stated primary role of extending payments and remittance services to small businesses and low-income households.

Besides, physical branches, some key facilitators for such services can include ATMs, mobile and internet banking, authorised business correspondents and point-of-sale terminal locations, as in retail stores.

"Reliance Industries Ltd. (RIL) has applied for a payments bank licence. RIL will be the promoter and State Bank of India will be the joint venture partner with equity investment of up to 30 percent," Reliance Industries said in a statement.

The venture is expected to be dovetailed with Reliance's ambitious plans to launch a pan-India broadband service network, initially covering all the states and some 5,000 cities and towns, accounting for over 90 percent of urban India and over 215,000 out of some 645,000 villages.

"The payments bank will leverage SBI's nationwide distribution network and its risk management capabilities along with the substantial investments made by RIL in its retail and telecom businesses," the company said.

"It will deploy state-of-the-art technology, build scalable infrastructure and create extensive branch and business correspondent network in order to provide last-mile access and intuitive user experience to all sections of society."

Aditya Birla Nuvo Limited (ABNL), promoter and largest shareholder of Idea Cellular, also applied for Payments Bank licence with the RBI, a filing in the Bombay Stock Exchange by the two 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 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.

The Kishore Biyani-led Future Group also Monday applied for a payments bank licence with the RBI, the banking entity would be called NuFuture Payments Bank.

The proposed payments bank will work towards extending the RBI's mandate of financial inclusion by focusing on the group's core consumer segments that include women, migrant workers, self-employed people as well as farmers and local entrepreneurs, the company said in a statement here.

Over 320 million customers visited Future Group retail chains in 2014, it added.

"The RBI's vision for the payments bank offers us an opportunity to bring us closer to our goal of offering more choice and convenience to Indians that help them plan their savings and consumption better," said group chief executive Kishore Biyani.