Man speaks on his mobile phone as he sits in front of a shop displaying the Idea Cellular Ltd's logo on its shutter in Mumbai
After a wait of over 10 months, Aditya Birla Idea Payments Bank Limited has commenced operations as a payments bank with effect from February 22, 2018, the Reserve Bank of India said on its website on Thursday.
Aditya Birla Idea Payments bank is among seven entities to get a final approval from the banking regulator. Airtel Payments Bank Ltd was the first payments bank to start operations in January 2017 followed by India Post. So far, Airtel, Paytm, India Post, and Fino Payments Bank have launched their operations.
“Aditya Birla Nuvo Limited, Mumbai was one of the 11 applicants which were issued in-principle approval for setting up a payments bank, on August 19, 2015,” RBI said.
One of the challenges for the payments banks is they have to fully meet the KYC (know your customer) norm requirement by RBI before February 28.
Idea Cellular had applied for a Payments Banks license in a 49:51 joint venture with Aditya Birla Nuvo Limited. On April 03, 2017, Aditya Birla Payments Bank Limited received a license from RBI.
The payments bank services were earlier slated to be launched in Q2FY18 after necessary regulatory approvals.
The payments bank is set up through the newly formed Aditya Birla Financial Services with the merger of Grasim Industries and Aditya Birla Nuvo, which received the payment bank licence.
Vodafone India will soon be merging with Idea Cellular and Vodafone m-pesa Limited is also among the 11 applicants which have received the licence. It is uncertain on what happens to the Vodafone payments bank licence post the merger.
According to Idea’s quarterly report, “The Payments Bank intends to promote a wide range of banking products & services including current and savings bank account, domestic remittances, merchant payments etc. while partnering with ABG financial services, select universal banks &financial institutions for offering range of full banking products including Demand Deposits, other related investment and Insurance products to its payments bank customer.”