Bharti Airtel Seeks India Bank Permit Amid Finance Inclusion BidBianca Vázquez Toness
Bharti Airtel Ltd, India’s largest mobile-phone operator, plans to help subscribers use their handsets to save money, pay bills and send cash to relatives.
A subsidiary of the New Delhi-based company, Airtel M Commerce Services Ltd, has applied to the Reserve Bank of India to set up a so-called payments bank, Bharti Airtel said in a statement Thursday, Jan. 29. If the license is granted, Kotak Mahindra Bank Ltd will buy a 19.9 percent stake in Airtel M Commerce Services, according to the statement.
Some 65 percent of Indian adults don’t have bank accounts, according a 2011 World Bank estimate, and Prime Minister Narendra Modi’s government had set a deadline of Jan. 26 for those people to gain them. The RBI changed rules in November to allow mobile-phone companies and supermarket chains to set up payments banks.
“The RBI’s vision for differentiated banks represents a significant step in furthering India’s financial inclusion agenda,” Bharti Airtel’s Chief Executive Officer for South Asia Gopal Vittal said in the statement. The RBI guidelines provide an “exciting and challenging” opportunity for the company to promote financial inclusion, he said.
“I believe that most development activities were hindered by the single disability of not having bank accounts,” Modi wrote in a Jan. 24 letter to bankers. “We have now overcome this disability.” Modi asked them to boost efforts to ensure all bank-account holders enroll for a unique biometric identifier, known in India as Aadhaar, and link it to their account. About 99.7 percent of households in India now have a bank account, Modi wrote.
Until now, Airtel has offered its Airtel Money service under a “Prepaid Payment Instrument” license, which allows users to pay certain bills and top up their phone accounts, but limits how much money they can save. The new license would allow subscribers to save as much as 100,000 rupees ($1,620), withdraw cash and transfer money more easily to individuals.
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