Aditya Birla Nuvo, which owns 49 percent stake in the payments bank with the remaining stake resting with Idea Cellular, aims to seek a valuation of Rs 1,000 crore
Aditya Birla Nuvo, which owns 49 percent stake in the payments bank with the remaining stake resting with Idea Cellular, aims to seek a valuation of Rs 1,000 crore for the two-month-old venture, two people aware of the matter told the paper.
Moneycontrol could not independently confirm the development.
The move comes at a time when the mobile phone-owned payments bank has been facing headwinds in setting up and launching operations.
“While the concept of small finance banks has taken off fairly well, the payments bank ecosystem is still reeling under cost pressures,’’ an executive from the industry told the paper, adding that a clear cut strategy of Aditya Birla for Idea Payments Bank still eludes them.
An Aditya Birla spokeswoman said, “We do not comment on market stories.”
Idea's venture started its operations in February after Aditya Birla Idea Payments Bank received licence from the Reserve Bank of India to start payments bank in April 2017. Idea’s rival and market leader Bharti Airtel was the first telecom entity to begin payments bank operations in November 2016.
The central bank has been pushing for the payments bank as the model offers services such as small savings accounts, payment or remittance services to migrant labour workforce, low income households, small businesses, unorganised sector entities encouraging users to be more financially inclusive.These pre-dominantly digital companies can accept deposits of up to Rs 100,000 per customer, but cannot give loans. This rule makes them ineligible to earn money from interest rates, the primary income source for conventional banks. Such entities primarily survive on fee income since 75 percent of their deposits have to be mandatorily invested in government bonds with maturity of up to a year.