Airtel M Commerce Services (AMSL), a subsidiary of Bharti Airtel, on 11 April 2016 was granted the first payments bank license from Reserve Bank of India (RBI).
AMSL is a wholly owned subsidiary of Airtel, which offers mobile money services under the brand name Airtel Money. It proposes to convert the existing pre-paid payment instrument license into a Payments Bank license as per the guidelines prescribed by the Reserve Bank of India.
RBI’s Guidelines for Licensing of Payments Banks
• The Payments Bank will be set up as a differentiated bank and shall confine its activities to acceptance of demand deposits, remittance services, internet banking and other specified services, as per RBI notification.
• Payments Banks will initially be restricted to holding a maximum balance of 1 lakh rupees per individual customer.
• They will be allowed to issue ATM/debit cards as also other prepaid payment instruments, but not the credit cards.
• These banks can also distribute non-risk sharing simple financial products like mutual funds and insurance products.
• They will not be allowed to undertake lending services and non resident Indians will not be allowed to open accounts.
On 19 August 2015, RBI had issued in-principle approval to 11 applicants to set up payments banks. The companies who were issued payment bank license under the Guidelines for Licensing of Payments Banks issued on 27 November 2014 included Aditya Birla Nuvo, Airtel M Commerce Services, Cholamandalam Distribution Services, Department of Posts (DoP), Fino PayTech, National Securities Depository, Reliance Industries, Dilip Shantilal Shanghvi, Vijay Shekhar Sharma, Tech Mahindra and Vodafone m-pesa.
All companies, which received in-principle approval from RBI in August 2015, will have to make their banks operational by March 2017.
Now get latest Current Affairs on mobile, Download # 1 Current Affairs App
When: 11 April 2016