Kotak stake in Airtel arm

Mumbai, Feb. 23: Kotak Mahindra Bank is picking up a 19.90 per cent stake in Airtel M Commerce Services Ltd (AMSL) for Rs 98.38 crore.

AMSL has got in-principle approval from the Reserve Bank to convert into a payments bank.

The private lender today said it had signed a share subscription and shareholders' agreement with AMSL and Bharti Airtel to acquire over 9.83 crore shares in AMSL.

AMSL is a 100 per cent subsidiary of Bharti Airtel and provides semi-closed prepaid instrument services. The company's revenue stood at Rs 121.4 crore in 2014-15.

While AMSL will convert into a payments bank, crucial services such as small savings accounts and remittances will bring a large number of low-income households and small businesses under the formal banking network, the bank informed the bourses today.

Kotak Mahindra Bank said it had obtained the RBI's approval for the acquisition of the equity stake in AMSL.

The announcement comes just days after Aditya Birla Nuvo said it had incorporated a new subsidiary for a payments bank jointly with group company Ideal Cellular known as Aditya Birla Idea Payments Bank Ltd. Aditya Birla Nuvo will hold up to 51 per cent in the venture. The rest will be owned by Idea Cellular.

In August last year, the RBI gave in-principle approval to 11 players to launch niche banks.

Kotak Mahindra Group