Tech Mahindra Ltd. a specialist in digital transformation, consulting and business re-engineering today announced that the Reserve Bank of India has granted an “in-principle” approval to the company to set up a Payments Bank under the Guidelines for Licensing of Payments Banks issued on November 27, 2014.
The bank will be an independent unit under the Mahindra Group led by Tech Mahindra, a Mahindra Group company and Mahindra Finance, a leading rural NBFC, as equal contributors to the new entity. This foray is another example of the group’s determination to drive positive change within its eco-system and beyond. The ultimate vision is to create a technology led Payment Bank that will reach every customer in India.
Anand Mahindra, Chairman, Mahindra Group said “We at Mahindra are honoured by this opportunity to drive financial inclusion across India through technology. This initiative will contribute to the creation of a truly ‘Digital India’ that empowers every citizen to enhance the quality of their lives. We will use the ‘click and brick’ model to ensure easy accessibility for every user of this new payment bank.”
CP Gurnani, CEO & MD, Tech Mahindra commented, “As the only IT player to be awarded this grant, it is indeed a huge moment for Tech Mahindra. This affirmative step by the government towards the larger motive for Digital India is a huge boost for Corporate India and we truly welcome this decision. As a leading global player with a strong presence and the trust bestowed upon the Mahindra brand we are truly in the right spot to deliver on our mission of financial inclusion not only in India but across the globe”.
Ramesh Iyer, CEO & MD, Mahindra Finance said “This is a momentous occasion for us as this initiative could be a potential game changer for the underserved customers especially in rural India. We hope to leverage the Group’s rural understanding and digital capabilities to deliver relevant financial solutions and thereby catalyze the transformation of Bharat.”
Tech Mahindra is in familiar territory as it already has a license from the RBI to run a prepaid wallet business, which is operating in the market under the brand name – Mobo Money. Also it has successfully deployed the model in other geographies with great success, which bears testimony to both implementation and scalability.
“We are the only company that has launched and rolled out NFC based payment ecosystem (Tap n Pay) that provide excellent user experience and is suitable for low literacy population”, added Mr.Gurnani.
Mahindra Finance, India’s leading rural NBFC has over the past two decades provided loans to over 4 million customers spread over 260,000 villages and has financed assets worth over
Rs. 150,000 crores. Most of the Company’s customers are outside the ambit of the formal financial system and are served by a pan-India network of over 1,100 branches and an in-house employee base of nearly 18,000 people.
It is noteworthy that each Mahindra company brings with it a unique set of cross skills that will help augment the product and in turn the user experience. While Mahindra Finance is a leading NBFC that comes with deep domain understanding of rural India, Tech Mahindra is a leading technology player in the BFSI segment. Mahindra Comviva, with 65 financial mobility deployments in over 45 countries across the globe will complement these strengths to create a payments bank that will enable financial inclusion within India.
The new entity will leverage learnings from each of the Group companies to establish a successful payments bank model that is suitable for India and meets the government’s vision of a “cash less” society. Its impact will be felt across small savings accounts, remittance services, low income households, small businesses, unorganized sector entities etc., by enabling high volume-low value transactions in deposits and payments. It is also a manifestation of the Mahindra Group’s continued support to key government initiatives including Digital India.