A number of relatively unknown companies have thrown in their hats for taking the niche banking licence. Most of these players already have some presence in the microfinance segment or service distribution.
Take, for instance, Manish Khera, MD and CFO of mobile money service provider YTS, who has applied for a small finance bank in his individual capacity. Khera has worked for 13 years with ICICI Bank and then founded Fino Paytech, which he quit towards the end of 2013.
“I have about 22 years of experience and my services with ICICI Bank and FINO Paytech is what I want to leverage. I think there is a huge opportunity in this space as there are large set of people who aren’t a part of large banks and there is a very different customer approach for this segment of the micro customer,” he says.
Kerala-based ESAF Microfinance has applied to RBI for small finance bank licence. ESAF Microfinance has branches across nine States and serves more than seven lakh clients. Micro-finance institution, Village Financial Services, has also applied for small finance banking licence.
Others who have applied for payments include Oxigen Services India Pvt Ltd, Paytm, Citrus Payments, Cholamandalam Investment and Finance Co, Videocon Industries and Vakrangee Ltd. As for small finance banks, there have been at least four applications — from SKS Microfinance, DHFL, IIFL Holdings Ltd (formerly India Infoline), and UAE Exchange.
While most of the smaller players have gone solo, bigger players have forged alliances. Aditya Birla Nuvo Ltd (ABNL) is in partnership with group company Idea Cellular in its application. If selected, ABNL will hold 51 per cent equity in the payment bank called “Idea Payments Bank Ltd.”
ABNL failed to make the cut when it applied for a new bank licence in the private sector last year. Kishore Biyani promoted Future Group too has applied for a payments bank licence. If the Group receives a license, then IDFC, which is in the midst of getting converted into a universal bank, may acquire a small equity stake in its payment bank.