Quietly without much fanfare, Aditya Birla Idea Payments Bank Ltd (ABIPBL) has officially started banking operations. ABIPBL is the brainchild of a joint venture between Aditya Birla Nuvo (ABNL) and group’s telecom firm Idea Cellular.
“Aditya Birla Idea Payments Bank Limited has commenced operations as a payments bank with effect from 22 February 2018,” stated a press release by RBI. “The Reserve Bank has issued a licence to the bank under Section 22 (1) of the Banking Regulation Act, 1949 to carry on the business of payments bank in India,“.
Idea Cellular is signing up retailers who sell its telecom services to also double up as banking touch points. Thus allowing customers to carry out banking transactions as simple as recharging their mobile. Idea Payments Bank or ABIPBL has also started partnering with e-commerce firms like ShopClues to allow its customers to pay directly from their accounts in Idea banking platform.
For those who are new to Payments Bank, the Reserve Bank of India (RBI) back in 2015 granted Payments Bank license to 11 entities. Payments Bank operate as a differentiated bank and can accept demand deposits, remittance services, internet banking and other specified services. But it can’t provide money lending services like loans. The main purpose of this type banks is to serve certain niche interests, remittance needs of small businesses, unorganised sector, low-income households, farmers etc.
Idea Payments Bank has become the fifth payments bank to commence its operation, after RBI give its in-principle approval to 11 applicants back in August 2015. Indian telecom major Airtel was the first to start payments bank operations in November 2016.
Then came Paytm Payments Bank, which started its official banking operation recently. The Department of Posts also got a license for a payment bank – India Post Payments Bank (IPPB) and currently running it on a pilot basis. Fino Payments Bank Ltd is another Payments Bank which is operational and providing banking services.