Shanghvi, IDFC Bank, Telenor withdraw payments bank proposals

Sun Pharma founder Dilip Shanghvi, IDFC Bank and Telenor have dropped plans to set up a payments bank in the country, nearly nine months after getting in-principle approval from the Reserve Bank. They are the second applicant to withdraw after Cholamandalam group pulled out of payments banks race a couple of months back.

Last year, Shanghvi as lead applicant, along with Telenor Financial Services and IDFC Bank was granted in-principle license by RBI to form a Payments Bank -- a differentiated bank that confine its activities to acceptance of demand deposits, remittance services and other specified services. "This decision, collectively made by the three partners, will be communicated to Reserve Bank of India. 

Consequently, the payment bank license will not be pursued," they said in a joint statement on Friday. 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), it added. 

"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 these plans, the payment bank license will not be pursued," Shanghvi said. 

"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 MD & CEO of IDFC Bank.