Telecom major Bharti Airtel is most likely to upgrade its payments bank into a Small Finance Bank (SFB). Bharti Enterprises chairman Sunil Mittal recently stated that the company is planning to upgrade from payments bank to SFB in a bid to attract large depositors.
Mittal said that “Airtel is seeing a lot of traction for its payments Bank and has been able to reduce churn of mobile customers due to this offering”. He added, “At some point in time, it will look to get its payment bank license upgraded to (that for) small finance bank, which could enable lending and increase deposit sizes (currently restricted to $1,500).”
The statement has been quoted by The Economic Times from an internal meeting hosted by Goldman Sachs.
Mittal’s comment on the conversion came days after the Reserve Bank of India’s (RBI’s) working committee suggested that payment banks, who are willing to upgrade into small lenders, can now apply for that if they have completed three years of operations. Airtel Payments Bank has already completed four years of operation.
A payments bank can only offer a small range of services such as savings bank account, remittance services, and other payment options.
Only six payment banks are now operational in India after receiving the liscence from RBI such as Paytm Payments Bank, Airtel Payments Bank, India Post Payments Bank, Fino Payments Bank, Jio Payments Bank and NSDL Payments Bank.