Vodafone Idea revealed in its fiscal Q4 results that it is considering merging its m-Pesa payments platform in India with an associate or a third party.
The company is exploring a possible merger due to rules set by the Reserve Bank of India (RBI), which prevent a single company from owning a payments banking business and a prepaid payment instrument business.
Vodafone Idea, following its merger, holds 100 per cent of Vodafone m-Pesa which it uses for payments in the county, and a 49 per cent stake in Aditya Birla Idea Payments Bank.
The Aditya Group owned Idea Cellular before the merger with Vodafone.
RBI guidelines state a “single promoter group” cannot have a payments banking business in one entity and a prepaid payment instruments business in another.
In the interim, however, Vodafone Idea has applied for an extension of a licence allowing it to operate both.
Following the merger, RBI allowed the business to continue operating both until December 2018, which was later extended to 31 March 2019.
Idea and Vodafone were among 11 operators to secure banking licences from the RBI in August 2015, as part of a government push to extend financial inclusion to non-banked consumers by providing basic services including taking deposits and handling payment transfers.