Alibaba Tasks Three Banks To Scout For Big Ticket Deals In India

One97 Communications Ltd is planning to separate its e-commerce and payments businesses as part of plans to go head first with the payments bank platform.

The companies that have been selected by the RBI have been given “in-principle” approval for 18 months, after which they will be given licences if they fulfil all conditions stipulated by the central bank.

India’s government has mounted a major campaign to bring more people in the world’s second-most populous country into the formal financial system-opening bank accounts for more than 170 million people since August, according to Prime Minister Narendra Modi. Payment banks are launching under a provisional period, and as a result there will be limitations, such as only letting consumers keep 100,000 Indian Rupees, or about $1,500, in their accounts.

Sunil Sood, the CEO of Vodafone India, said the approval received Wednesday by the company’s M-Pesa payments unit would allow it to “offer a more comprehensive portfolio of banking and financial products and services, accelerating India’s journey into a cashless economy”.

Reserve Bank of India has granted approval to eleven companies including several telecoms to offer financial services in India. “We will start with gold loans as a category and are in talks with multiple leading financial services players to sell mutual funds and other financial instruments”, Vijay Shekhar Sharma told TOI. “We will disrupt the financial services business in India much like what Flipkart has done to retail”.

One97’s Paytm also said a license would help it offer a broader range of financial services, something that could boost its e-commerce business. Paytm, for example, could let users put money into its marketplace to pay for services like Uber, but that money could not be cashed out. After investing in Paytm and Snapdeal, China born Alibaba is now looking for “more mature” entities in the Indian market. Ant Financial owns 25% of One97. Alibaba firm had already created similar records with its $25bn listing on NYSE and is especially keen on O2O (offline to online) space, apart from pure play eCommerce and mobile-focused commerce companies.