MUMBAI : Payment solutions provider ITZCash is open for a tie-up with other entities for a payment bank licence, a top official of the company said.
“We have always been open for partnership. We already have three banks partners. But, a tie-up for payment bank is something that we are still pondering,” ITZCash Managing Director Naveen Surya told.
“I always have been advocating that if you bring partner with unique strengths, your probability of success increases,” he added.
ITZCash, an Essel Group company, is currently offering prepaid cards in association with IDBI Bank, DCB and HDFC Bank.
Last month, the Reserve Bank issued guidelines for payments and small finance banks with an aim to further financial inclusion by providing basic banking facility to un-banked population of the country.
A payment bank will provide small savings account and payments or remittance services to migrant labour workforce, low income households, small businesses and other users.
The co-branded prepaid cards offered by ITZCash allows the under-served to pay bills, shop online or by phone and withdraw cash at ATMs, even without having a bank account.
When asked whether the company was looking to tie-up with its existing partners for a payment bank, Surya said the decision is yet to be taken.
“Although some of our offerings are close to banking products, we don’t have actual experience of banking. And, if there is someone, who is already into banking for many years and has understanding of the business, then it could be a win-win situation for both of us,” Surya added.
For a payment bank, the RBI has kept a minimum paid-up equity capital of Rs 100 crore.
Surya said raising funds to meet the minimum paid-up capital requirement is not an issue and the company is working on it.
“Our existing promoters are very committed and they can invest fully. We also have received proposals from some other investors,” he said.
A payment bank will offer small savings account, where customers can deposit up to Rs one lakh. It, however, cannot undertake lending activities.
It can issue an ATM or debit cards but will not be allowed to issue credit cards. It can act as a business correspondent of another bank.
The bank will have to maintain a cash reserve ratio (CRR) and will be required to invest minimum 75 per cent government securities. The deadline to apply for payment banking licence is January 16. (AGENCIES)
Follow our WhatsApp channel