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RBI grants payments bank license to AMSL

Update On :13 April 2016

RBI grants payments bank license to AMSL

In a regulatory filing, Bharti Airtel (Indian global telecommunications Services Company) said that they are pleased to inform that Airtel Mobile Commerce Services Limited (AMSL) has received payments bank license from Reserve Bank of India on April 11, 2016. AMSL is a wholly owned subsidiary of Airtel which offers mobile money services under the brand name Airtel Money which proposes to convert the existing pre-paid payment instrument license into a Payments Bank license as per the guidelines prescribed by the RBI.

In fact, Airtel became the first among the 11 entities which were granted in-principle approvals in August 2015 to receive the formal license from the central bank. RBI in August last had given in-principle to the company, which operates under brand name of Airtel Money, along with 10 others, including Reliance Industries, Aditya Birla Nuvo, Vodafone m-pesa, Department of Posts, for starting operations as a payments bank.

As per RBI notification, the Payments Bank will be set up as a differentiated bank and shall confine its activities to acceptance of demand deposits, remittance services, Internet banking and other specified services. These banks will be improving the financial inclusion in the country by getting the unbanked into the banking system. Deloitte Haskins & Sells LLP and Tech Mahindra and all the other players in the segment are also expecting to launch their payment banks in the current fiscal.

Payments Banks will initially be restricted to holding a maximum balance of Rs 1 lakh per individual customer. They will be allowed to issue ATM/debit cards as also other prepaid payment instruments, but not the credit cards. These banks can also distribute non-risk sharing simple financial products like mutual funds and insurance products. They will not be allowed to undertake lending services and non resident Indians will not be allowed to open accounts.

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