In a major boost to telecom major Bharti Airtel’s plan to raise foreign ownership limit, the company has received almost all regulatory approvals required to raise foreign direct investment (FDI) in its downstream companies.
According to sources, Bharti Airtel has got approval to raise FDI in its payments bank from the Reserve Bank of India (RBI) and the Foreign Investment Promotion Board (FIFB), the nodal agency.
According to RBI guidelines, the payments bank can raise FDI up to 74 percent.
The company is reportedly planning to enter into a full-fledged lending business by converting its payments bank into a small finance bank (SFB).
Bharti Enterprises chairman Sunil Mittal had said that the company might upgrade its payments bank to SFB to attract large depositors.
Apart from this, the company has got approval from Department of Telecom (DoT) to raise FDI in three of its subsidiary’s companies -- Bharti Hexacom, Bharti Telecsonic and Bharti Teleport.
Bharti Hexacom offers telecom services in seven circles including Rajasthan. While Bharti Telesonic has Airtel’s fibre assets, Bharti Teleport holds the licence for inflight connectivity services.
Both Bharti Airtel and Bharti Telecom had received approvals from DoT last year to raise FDI up to 100 percent. However, there is a catch; The Union Cabinet has raised the FDI limit in direct-to-home (DTH) services. The Cabinet approved 100 percent FDI in DTH service, extension of the licence period from 10 years to 20 and a reduced licence fee.
According to sources, Bharti Airtel is waiting for the Information and Broadcasting Ministry’s nod on the same. Once the approval comes in, Bharti Airtel would apply to NSDL to increase its foreign ownership limit.
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