Reserve Bank of India has granted payments bank license to telecom major Bharti Airtel. Bharti Airtel had applied for the payments bank license last year in partnership with Kotak Mahindra Bank through AMSL (Airtel M Commerce Services Limited).
“We are pleased to inform you that Airtel M Commerce Services Limited (AMSL), a subsidiary of Bharti Airtel Limited, has been granted payments bank license from Reserve Bank of India on April 11, 2016,” said Airtel.
AMSL is a wholly owned subsidiary of Airtel, offers mobile money services under the brand name ‘Airtel Money’ (launched in 2011). Airtel Money was the first mobile-based prepaid payment service launched in the country.
According to the agreement, Kotak had picked up 19.90% stake in AMSL, which amounts to around INR 98.38 Cr. in February.
RBI had granted ‘in principle’ approval to 11 companies, which included Paytm, Reliance, Aditya Birla Nuvo, Department of Posts, among others to set up payment banks in August last year. AMSL was one of the 11 entities.
The move will help Kotak to break new grounds among the unbanked and expand its reach in the rural market. On the other side, Kotak’s banking expertise will help Airtel deliver financial services to unbanked citizens.