What : ICICI Bank Partnered with FINO PayTech
When : 07,January,2016
ICICI Bank will partner FINO PayTech to foray into the payments bank space, a top official said on Thursday.
“We have tied up with ICICI Bank as a partner bank for our payments bank foray. That discussion is already closed. We are now working to identify the areas where we will work together for building up avenues,” Mr. Rishi Gupta, managing director and chief executive officer of FINO PayTech, told The Hindu.
ICICI Bank joins some of the leading lenders of the country which have partnered with payments banks that have received licence from the banking regulator. For example, State Bank of India and Kotak Mahindra Bank have picked up stake in the payments banks that will be floated by Reliance Industries and the Bharti Group, respectively.
The ICICI Group, with about 16 per cent stake in FINO Paytech, a business correspondent, is the largest domestic shareholder.
FINO Paytech has received ‘in principle’ licence from the Reserve Bank of India (RBI) to start a payment bank.
RBI regulations allow universal banks to invest up 30 per cent in payments bank.
“ICICI can increase stake if there is a requirement from us to increase the stake,” Mr. Gupta said when asked about whether the lender is looking to increase its stake.
RBI regulations also mandate 51 per cent of the equity of the payments bank should be with domestic entities, In FINO PayTech, about 70 per cent stake is with foreign entities.
Mr. Gupta said FINO would raise capital which will help bring down foreign shareholding. FINO is planning to raise about Rs.500 crore from private equity and other strategic investors.
Among foreign shareholders, Blackstone owns about 20 per cent in the company, while Intel Capital, Headland Capital Partners and World Bank’s International Finance Corporation (IFC) hold 15 per cent each. The tie-up with ICICI Bank will help FINO to extend services which a payments bank is not allowed to offer. “ICICI Bank has a stake in FINO PayTech, the parent company of the payments bank. So, we already have an existing relationship. Now we are partnering with the bank for helping us to build some products and services that we cannot offer on our own,” Mr. Gupta said adding the lender will also offer its help to set up the bank.