India’s Leading Mobile Phone Operators Among Companies to Receive Payment Bank License

Among the 11 firms chosen by India’s Central Bank to establish “payment banks”, country’s leading mobile network operators like Vodafone India and Bharti Airtel have secured a place. Payment banks are aimed at offering millions of Indians, the access to basic banking. Reliance Industries Limited, owned by Mr.Mukesh Ambani, also has got a nod from the Government to set up payment bank in partnership with State Bank of India. Through payment banks, people will be able to make deposits and remittances but will not be able to avail loans. 

A part of financial inclusion plan, payment banks are expected to take banking services to the rural and semi-urban India. Payment banks will offer transaction services to banked, under banked and small businesses across the country. India’s postal office, a joint venture of Idea Cellular and Aditya Birla Nuvo was also chosen by the Reserve Bank of India. The companies will be provided an in-principal approval for 18 months and will be offered licenses if they fulfil the conditions specified by the RBI.

Payment banks allow the customers to make remittances and deposits. Conventional banks offer loans and fund transfer services to its customers wherein they can transfer money to another account by mentioning the IFSC code of the beneficiary bank. However, payment banks will take banking a level higher in a nation where less than half the population has a bank account.

News Source: http://www.telecomengine.com/node/95826