Dilip Shanghvi-IDFC Recalls Payment Bank Venture

Sun Pharma promoter Dilip Shanghvi, Telenor Financial Services and IDFC Bank, who had proposed a payment bank venture last year, have decided not to pursue the same on undisclosed grounds. The three partners had been in the process of forming the venture in India after securing the concerned license from the Reserve Bank of India. This decision, collectively made by the three partners, will be communicated to RBI and the payment bank license will not be pursued.

In September 2015, Dilip Shanghvi as lead applicant along with Telenor Financial Services and IDFC Bank was granted in-principle license by RBI to form a payments bank in India. During the past eight months, representatives of these three partners have worked together to establish relevant frameworks and a governance structure for the proposed joint venture (JV).

“Telenor Financial Services and IDFC Bank have rich experience from offering financial services and the intention of the JV was to combine our expertise to launch a robust payment bank service in India. Following the mutual decision to withdraw the plan, the payment bank license will not be pursued,” said Dilip Shanghvi on behalf of Dilip Shanghvi Family and Associates--the investor entity.

The parties have not disclosed the reason for the recall of the joint venture. The RBI had in August last year granted 11 licences for payment banks, which can float these banks that can accept deposits of up to Rs 1 lakh but cannot lend money. Key license holders, besides DSA-IDFC, included Reliance-SBI combine, Aditya Birla Nuvo (Idea Cellular), Airtel, Vodafone, Department of Posts, FINO PayTech, Tech Mahindra, National Securities Depository Ltd and Paytm.

“It was a good experience working with Telenor Financial Services and Dilip Shanghvi over the last year. We thank them for their support and look forward to future associations,” said Rajiv Lall, founder managing director and CEO of IDFC Bank.

“From the day we signed the Letter of Intent, we have worked hard together with our partners to form a company which can meet the demand for basic banking services across India. We are thankful to both IDFC Bank and Dilip Shanghvi for their efforts throughout this process,” said Tine Wollebekk, Senior vice president and Head of Telenor Financial Services.