Vodafone, Idea Cellular and Reliance Industries have all applied to become payments banks — cutdown versions of traditional banks which the Indian government hopes will boost financial inclusion.
The operators are either in partnerships for their bids, or looking at them, with banks the main choice of ally.
A subsidiary of Bharti Airtel, the country’s largest operator, said last week it would be among the bidders, along with Kotak Mahindra Bank. The deadline was 2 February.
But operators face stiff competition from outside the mobile industry — the Reserve Bank of India (RBI) said it had received 41 bids for payments bank licences.
RBI has not specified how many licences are on offer, or when it intends to award them.
Payments banks offer cash-in, cash-out and remittance services but are not allowed to lend money to their customers. Their intended target is the unbanked and underbanked.
Operators, retailers and prepaid payment firms are among those permitted to apply for payments bank licences.
A second category called small finance banks attracted 72 applications.
Since the newcomers will offer relatively little competition to existing banks, the RBI is expected to be relatively generous in the number of licences it issues.
Reliance Industries is applying with State Bank of India (SBI), which will hold up to 30 per cent in the joint venture.
The venture will combine SBI’s nationwide distribution network with Reliance’s retail and telecoms presence. 4G operator Reliance Jio Infocomm is a subsidiary.
Leading conglomerate Aditya Birla Group is bidding via a vehicle in which AB Nuvo will hold a 51 per cent stake and the group’s mobile business Idea Cellular holds 49 per cent.
AB Nuvo is the group’s holding company for the insurance and mutual fund business.
Vodafone is bidding and is looking at options for possible partners.