Indian Telecom Giant Prepares to Enter Payment Banking Space

In an attempt to leverage the untapped potential of Indian banking market, Indian telecom giant Bharti Airtel has announced plans to apply for a payment-banking license.

The license, which is being issued by the Reserve Bank of India, is part of a program to introduce hundreds of millions of Indians without bank accounts to its financial system.

With the license, Bharti Airtel would be able to provide small savings account and remittance services to small businesses, Indian migrant laborer’s and low-income households. However, the license would not let the company lend money.

Upon approval of license, Bharti group would sell off 19.9 percent of its stake in its Airtel M Commerce Services to Kotak Mahindra Bank.

“Kotak’s banking expertise coupled with Airtel’s strength in telecom will help deliver financial services to millions of unbanked citizens across the country,” said Gopal Vittal, CEO, Indian operations, Bharti Airtel.

Initially, the payments bank account would be allowed to hold a maximum balance of INR 100,000 per customer. The bank account holders would be provided with debit cards, but not credit cards. The license would also allow the payment banks to distribute non-risk sharing simple financial products like mutual funds and insurance products.

With over 215 million subscribers, Airtel is the largest mobile service provider in India having a 31 percent market revenue share. The company launched “Airtel Money” in 2011 making it the country’s first pre-paid mobile payment service, according to

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