Indian telecoms giant Bharti Airtel is reportedly looking to revive a payment banking joint venture with the State Bank of India (SBI).
The parties are in early-stage discussions about developing a joint payment banking model, India’s ET Now news…
Indian telecoms giant Bharti Airtel is reportedly looking to revive a payment banking joint venture with the State Bank of India (SBI).
The parties are in early-stage discussions about developing a joint payment banking model, India’s ET Now news channel reported citing sources familiar with the talks.
The deal structure will depend upon the Reserve Bank of India’s (RBI) final policy on payment banks, the report added. In July, RBI issued ‘draft norms’ for those seeking to open payment banks, which can accept but not lend funds, in an effort to extend banking services nationally. The banking regulator has set a deadline of 28 August for public comment on the draft policy.
Bharti and SBI were not immediately available for comment.
Kamlesh Bhatia, a research director at Gartner in Mumbai, noted that Bharti and SBI first announced they had entered into a JV back in January 2011, adding that “not much has happened since then”. At the time, local reports said the JV partners would offer banking products and services mostly in rural areas.
Bhatia said the new agreement, if completed, could extend the existing JV, enabling Bharti to operate like a payment bank, subject to RBI policy and approvals.
“An alliance with SBI will give Bharti a solid footing to position itself as a preferred channel for payments and remittances,” he said. “SBI, on the other hand, will benefit from better access to the rural unbanked population. Telecoms operators globally have been leveraging mobile banking and commerce to driver greater stickiness and pricing power.”
