Sun Pharma promoter Dilip Shangvi who had partnered with IDFC Bank and telecom operator Telenor to start a Payments Bank, has surrendered his license, reports Mint. Shangvi had received an in-principle approval from the Reserve Bank of India (RBI) in August 2015. In a joint statement, the three partners said that they would be communicating their decision to the RBI and not pursue a payments bank. It however did not specify a reason for why it would not commence payments bank operations. Not the first to quit RBI had permitted 11 entities to start a payments bank, with this development the list is down to nine. In March this year, Cholamandalam Investment and Finance Company had decided to abandon its plans to set up a payments bank, saying that the decision came from the board after “considering competition and other factors, including the long gestation period”. Issues with the Payments Bank license Payments banks cannot undertake any lending operations. However, they can offer other non-risk sharing simple financial services activities, not requiring any commitment of their own funds, such as distribution of mutual fund units, insurance products, pension products, etc. They will also have to invest minimum 75% of its “demand deposit balances” in Government securities or Treasury Bills with maturity up to one year and hold maximum 25% in current and time / fixed deposits with other scheduled commercial banks for operational purposes and liquidity management. They will also be required to maintain a Cash Reserve Ratio (CRR) with RBI on its outside demand…
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Another Payments bank license surrendered: Telenor, IDFC Bank and Sun Pharma promoter consortium quits
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