MUMBAI: The country’s top business houses threw in their hat to participate in government’s financial inclusion plan by reaching financial services to the less-privileged in the remotest parts of the country.
Reliance Industries, Aditya Birla Nuvo, Future Group and Vakrangee Ltd are among those who have applied for Payment Banks on the last date of putting in applications. A few applied to operate Small Finance Banks, including SKS Microfinance, Dewan Housing Finance and UAE Exchange.
Reliance Industries applied for Payment Bank licence with partner as the State Bank of India, which will take 30 per cent stake in the joint venture. Another, Aditya Birla Nuvo Ltd (ABNL) said it will be the main promoter, with 51 per cent equity. Idea Cellular will hold the remaining 49 per cent. Idea is also Aditya Birla group company, where ABNL is the largest promoter shareholder.
“Besides promoting financial inclusion by providing banking and transaction services to unbanked, under-banked and small businesses, the partners see formation of the Payments Bank as an opportunity to lead and co-create an eco-system to provide accessible, simple and affordable banking solutions; digitize payments and act as a catalyst towards a cashless society; and democratize banking and payment services through massive adoption and low transaction costs,” the two companies said in a statement.
Axis Bank is said to be ‘evaluating potential partners’ and ICICI Bank is in a similar stage.
“There is nothing on the cards, but we will always be open to looking at opportunities,’’ Chanda Kochhar, managing director and CEO of ICICI Bank said on Friday. “There would be some people who look at partners if and after they get licences, so that's why this field will continue to remain open and will continue to keep examining what the options are.”
IDFC and Kishore Biyani-promoted Future Group are coming together to build an alliance. “IDFC may acquire a small equity stake in Future’s venture, subject to its receiving a licence from RBI and subject to IDFC’s own internal board approvals,” IDFC said adding it has neither made any investment nor made any firm commitment to invest in Payment Bank of the Future Group unconditionally.
Future Group said it plans to operate the payment bank, if granted by RBI, through a separate company, NuFuture Payments Bank.
Kotak Mahindra Bank last week announced its plan to take a 19.99 per cent stake by partnering with Airtel M-Commerce Services. Some reports suggest that Vodafone and YES Bank are in discussions for a possible tie-up but officials on both the sides declined comment.
The RBI opened up the sector for new specific-purpose Payment Banks and Small Finance Banks to further the financial inclusion, which got a fillip by the government launching Jan Dhan Yojana with a missionary zeal.
“The objectives of setting up of payments banks will be to further financial inclusion by providing small savings accounts, payments and remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users,’’ the RBI said in its guidelines in November.
Meanwhile, NBFC and microfinance firm in Kerala ESAF Microfinance has applied for a small finance bank licence. ESAF has branches across nine states serving over 7 lakh clients.
K Paul Thomas, founder chairman and managing director, ESAF said that small finance bank status would help the organisation meet the much needed demand for lending more than ` 50,000, especially to support micro enterprises, small businesses and agriculture and allied activities.
ESAF has presence in Jharkhand, Chhattisgarh, Maharashtra, Kerala and Madhya Pradesh. ESAF plans to expand its operations to N-E States. ESAF Microfinance is headquartered at Thrissur.
UAE Exchange India has also applied for a small bank licence. “Applying for a small bank licence and upgrading our company to a bank is only a natural extension from its present position to serve our customers with much better financial provisions,” said UAE Exchange India managing director V George Antony said in a statement.
The company has 390 direct offices in various states with around 4,000 direct employees and a business correspondents network of around 6,629 individual agents.
IIFL Holdings Ltd has also submitted an application to the RBI for a licence for setting up small finance bank.