Following Airtel and Reliance Industries Limted (RIL), telecom operator Idea Cellular has said that it has submitted an application to the Reserve Bank of India to form a payments bank. Aditya Birla Nuvo Limited, the promoter group and largest shareholder of Idea Cellular, will hold 51% equity in the payments bank while Idea Cellular will hold up to 49%. In a filing with the Bombay Stock Exchange, the company added that the proposed payments bank will be named "Idea Payments Bank Limited". Note that Idea Mobile Commerce Services, which is a wholly owned subsidiary of Idea, has a prepaid payment instrument (PPI) licence from the RBI. The company also said that once it gets a payments bank licence, the business carried on by the PPI Issuer will be folded into such Payments Bank. Earlier in November, Idea Cellular launched its mobile money service ‘Idea Money. Similar to other mobile money services, Idea Money allows Idea subscribers to conduct various transactions like prepaid mobile recharges, DTH recharges, utility bill payments and postpaid bill payments among others. Partnerships with banks It's also worth noting that Idea had an earlier partnership with Axis Bank and had launched Idea MyCash, its financial inclusion platform offering banking facilities including money transfer on mobile. We wonder if there will be a more strategic alliance between the telecom company and the lender. Remember, the Reserve Bank of India's guidelines for payments bank say that 25% of the funds in a payments bank can be invested in timed deposits in scheduled commercial…
