Airtel Payments Bank has received approval from the Reserve Bank of India (RBI) and the central government to raise its foreign ownership limit to 74%, two people aware of the development told MediaNama on the condition of anonymity. The development was first reported by CNBC Awaaz. Airtel did not respond to queries sent by MediaNama. The payments bank, which is owned by Sunil Mittal-led Bharti Airtel, was the first of its kind to launch in 2016-17. Given its massive network as a telecom player, the company was able to launch as a digital-only bank and garner a large number of deposits in a short amount of time. Payments banks could convert to SFBs depending on RBI policy In a meeting with Goldman Sachs last month, Mittal said that the payments bank plans to convert to a Small Finance Bank (SFB) in due course and become a full-fledged banking entity. "At some point in time, it will look to get its payment bank license upgraded to (that for) small finance bank, which could enable lending and increase deposit sizes (currently restricted to $1,500)," the Economic Times quoted Mittal saying. His comments came a few days after an RBI working group recommended that payments banks be allowed to convert to a SFB after a period of three years of operations. This is a relaxation of the RBI's on-tap licensing guidelines for SFBs, which stated that payments bank can convert after completing five years of operations. If the working group’s recommendations are accepted…
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