Telecom major Bharti Airtel is planning to enter into a full-fledged lending business by converting its payments bank into a small finance bank (SFB).
Bharti Enterprises chairman Sunil Mittal has said that the company might upgrade its payments bank to SFB to attract large depositors.
Mittal said that "Airtel is seeing a lot of traction for its payments Bank and has been able to reduce churn of mobile customers due to this offering". He added, "At some point in time, it will look to get its payment bank license upgraded to (that for) small finance bank, which could enable lending and increase deposit sizes (currently restricted to $1,500)," The Economic Times quoted Mittal's statement from an internal meeting hosted by Goldman Sachs.
Recently, in the September quarter, the monthly churn in the mobile services of Airtel fell 1.7 per cent from 2.2 per cent in April-June.
Mittal's comment has come days after the Reserve Bank of India's (RBI's) working committee recommended payment banks, who are looking to convert into small lenders, can apply to do so after three years of operations. Airtel Payments Bank has finished four years of operation.
A payments bank can only provide services such as savings bank account, remittance services, and other payment options.
Only six payment banks are operational in India, including Paytm Payments Bank, Airtel Payments Bank, India Post Payments Bank, Fino Payments Bank, Jio Payments Bank and NSDL Payments Bank.
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