After the Murugappa Group, Telenor Financial Services, IDFC Bank and Dilip Shanghvi on Friday jointly announced withdrawal of the ongoing efforts to form a payments bank venture in India. This decision, collectively made by the three partners, will be communicated to RBI.
In September 2015, Sun Pharma promoter Dilip Shanghvi as lead applicant along with Telenor Financial Services and IDFC Bank was granted in-principle licence by the Reserve Bank of India to form a payments bank in India. During the past eight months, the three partners have worked together to establish relevant frameworks and a governance structure. “Telenor Financial Services and IDFC Bank have rich experience from offering financial services and the intention of the JV was to combine our expertise to launch a robust payment bank service in India. Following the mutual decision to withdraw these plans, the payment bank licence will not be pursued,” said Dilip Shanghvi on behalf of Dilip Shanghvi Family & Associates.
“From the day we signed the Letter of Intent, we have worked hard together with our partners to form a company which can meet the demand for basic banking services across India. We are thankful to both IDFC Bank and Dilip Shanghvi for their efforts throughout this process,” said Tine Wollebekk, Head of Telenor Financial Services.
“It was a good experience working with Telenor Financial Services and Dilip Shanghvi over the last year. We thank them for their support and look forward to future associations,” said Rajiv Lall, MD & CEO IDFC Bank.
In March this year, Cholamandalam Investment and Finance Company Ltd, the financial services arm of the Chennai-based Rs 26,900-crore Murugappa Group, decided to withdraw from setting up a payments bank, for which the company has got banking regulator’s approval.
Cholamandalam and Telenor-IDFC-Shanghvi were two of the 11 firms which got in-principal approval from the banking regulator to set up payment banks in the country. Chola did not cite any reason for the pulling out of the payments bank plan.