Airtel M Commerce Services (AMSL), a subsidiary of Bharti Airtel has been granted the first payments bank license from Reserve Bank of India (RBI) today.

On August 19, 2015 Reserve Bank of India (RBI) had issued “in-principle” approval to 11 applicants to set up payments banks. The companies who were issued payment bank license under the Guidelines for Licensing of Payments Banks issued on November 27, 2014 include: Aditya Birla Nuvo, Airtel M Commerce Services, Cholamandalam Distribution Services, Department of Posts (DoP), Fino PayTech, National Securities Depository, Reliance Industries, Dilip Shantilal Shanghvi, Vijay Shekhar Sharma, Tech Mahindra and Vodafone m-pesa.

Airtel M Commerce Services Limited (AMSL) is a wholly owned subsidiary of Airtel which offers mobile money services under the brand name “Airtel Money” is proposing to convert the existing pre-paid payment instrument license into a Payments Bank license as per the guidelines prescribed by the Reserve Bank of India. Kotak will be investing 19.9 percent in AMSL, subject to regulatory approvals.

The process for selecting the applicants was based on detailed scrutiny by an External Advisory Committee (EAC) under the chairmanship of Dr Nachiket Mor, director, Central Board of the Reserve Bank of India. The recommendations of the EAC were an input to an Internal Screening Committee (ISC), consisting of the governor and the four deputy governors.

The Reserve Bank of India had received 41 applications for payments banks.

The “in-principle” approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfill the other conditions as may be stipulated by the Reserve Bank.

On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of “in-principle” approval, RBI would consider granting to them a license for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular license is issued, the applicants cannot undertake any banking business.#casansaar (PTI)