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Union Bank keen to join payments banks bandwagon

By Religare

Union Bank of India said it is open to form a partnership to set up a payments bank and has approached nine of the 11 entities, which have received 'in-principle' approval for the differentiated banks from the regulator, reported PYI.

"We have already written to nine entities, which have been granted 'in-principle' approval. We are awaiting their response," Union Bank CMD Arun Tiwari told reporters.

Last week, the Reserve Bank had given permission to 11 applicants, including Reliance Industries, Department of Posts, Aditya Birla Nuvo, Sun Pharma's Dilip Shanghvi, Airtel, Tech Mahindra and Vodafone, to set up payments banks.


Other players included National Securities Depository, Fino PayTech, Cholamandalam Distribution Services and Vijay Shekhar Sharma of PayTM.

As many as 40 entities/individuals had applied for payments banks licences.

When asked whether the bank will prefer tying up with a telecom operator, who have already received the approval, Tiwari said, "We need to look beyond telecom players."

Meanwhile, Reliance Industries has partnered with the country's largest lender State Bank to set up the payments bank, in which SBI will be holding 30 per cent stake.

The Department of Posts, which sits over Rs 7 trillion of postal savings, has said it is also in talks with telecom companies which have already been given RBI's approval for payments bank.

Cholamandalam Distribution Services also said it is keen on partnering with other players for the bank and will be seeking RBI's view on the same.

Under the RBI guidelines, a payments bank can not take deposits and thus engage in credit as also can not issue credit cards. They can engage in other banking activities.

Story first published: Tuesday, August 25, 2015, 9:20 [IST]
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