ICICI Bank partners with FINO PayTech for payments bank space
India’s largest private sector lender ICICI Bank has partnered with FINO PayTech to foray into the payments bank space.
With this partnership, ICICI Bank joins some of the leading lenders of the country that have partnered with payments banks. For example, Kotak Mahindra Bank (KMB) and State Bank of India (SBI) have picked up stake in payments banks to be floated by Bharti Group and Reliance Industries respectively.
- FINO Paytech along with 10 other entities had received ‘in principle’ licence from the Reserve Bank of India (RBI) to start a payment bank.
- ICICI Group has purchased about 16 per cent stake in the FINO PayTech making it one of the largest domestic shareholder.
- The tie-up with ICICI Bank will help FINO to extend services which a payments bank is not allowed to offer. It will also help it to build some banking products and services that they cannot offer on our own.
Presently, RBI regulations allow universal banks to invest up to 30 per cent in payments bank. RBI regulations also mandate 51 per cent of the equity of the payments bank should be with domestic entities.
In case of FINO PayTech it has about 70 per cent stake is with foreign entities. Before starting payments bank business it is going to raise capital which will help bring down foreign shareholding within prescribed limit.