Airtel M Commerce Services, a subsidiary of telecom service provider Bharti Airtel Ltd., was granted payments bank licence by the Reserve Bank of India (RBI) Monday. Bharti Airtel informed stock exchanges of the development in a regulatory filing.
"We are pleased to inform you that Airtel M Commerce Services Limited (AMSL), a subsidiary of Bharti Airtel Limited has been granted payments bank licence from Reserve Bank of India on April 11, 2016," Airtel said in a regulatory filing, reported PTI.
The announcement was made by Bharti Airtel after trading hours Monday. The Bharti Airtel stock closed with a gain of 4.20 percent at Rs. 348.35.
Airtel M Commerce, along with 10 other entities including Reliance Industries, Aditya Birla Nuvo, Vodafone m-pesa, Department of Posts, National Securities Depository Limited, Tech Mahindra Limited and Vodafone m-pesa Limited were given in-principle approval in August last year for commencing business as payments banks. The "in-principle" approval granted is valid for 18 months.
Such banks are part of the differentiated banking system being promoted by the RBI. Payments banks can accept demand deposits, issue credit and debit cards, undertake activities pertaining to payments and remittances through various channels.
Payments bank will initially be restricted to holding a maximum balance of Rs. 100,000 per individual customer.
Payments banks are not permitted to lend money.
The RBI laid down the minimum paid-up equity capital for payments banks at Rs. 100 crore, of which the promoter's minimum initial contribution to the paid-up equity capital shall at least be 40 percent for the first five years from the commencement of its business.
Bharti Airtel recently acquired 4G spectrum from another telecom service provider Aircel and Dishnet Wireless for eight circles for Rs. 3,500 crore. The spectrum is valid upto September 2030.