Kotak Mahindra Bank acquires 19.9% stake in Airtel M Commerce for Rs 98.38 crore

NEW DELHI: Private sector lender Kotak Mahindra Bank has acquired 19.9% stake in Airtel M Commerce Services Ltd (AMSL) for Rs.98.38 crore to set up a payments bank.

AMSL was incorporated in April 2010 as a 100% subsidiary of Bharti Airtel Ltd. The company is in the business of providing the service of semi-closed prepaid instrument and offers services under the ‘Airtel Money’ brand name.

"Total revenue of AMSL in 2014-15 was Rs.121.4 crore, up from Rs.42.6 crore in 2013-14," said Kotak Mahindra Bank  while informing to SE Ltd. (Bombay Stock Exchange).

AMSL was one of the 11 entities that won the in-principle licence from Reserve Bank of India (RBI) for setting up of payments banks.

The other applicants includes Reliance Industries, Vodafone, Idea Cellular, Department of Posts, Cholamandalam Distribution Services, Tech Mahindra, National Securities Depository Limited (NSDL), Fino PayTech, Sun Pharma’s Dilip Shantilal Shanghvi and PayTM.

On January 29, 2015, Kotak Mahindra Bank had agreed to invest 19.90% in Airtel M Commerce Services Limited.

A payments bank can accept deposits, both savings and current, up to a maximum of Rs.10,000 initially, with the stated primary role of extending payments and remittance services to small businesses and low-income households.

Some key facilitators for such services can include ATMs, mobile and internet banking, authorised business correspondents and point-of-sale terminal locations, as in retail stores.