Telenor Keen on Setting Up 'Payments Banks' in India

New Delhi: Norwegian telecom major Telenor has said that it is evaluating the 'payment banks' business opportunity in India.

"It is a good step forward. In many countries we are leading mobile money services. I welcome the structure and we will surely have look at it," Telenor Group CEO Jon Fredrik Baksaas said in reply to a query on the company's interest in setting up payment banks in the country.

The Reserve Bank of India had issued draft guidelines for setting up payment banks to facilitate small savings accounts, payments and remittance services to migrant labour workforce.

As per draft guidelines mobile service providers are also eligible for setting up payment banks.

Telenor has its own fully-owned financial institution in Serbia. The company provided mobile banking services in Pakistan, Bangladesh, Malaysia and Thailand. The company offers mobile payment service in Hungary.

Its Indian arm Uninor offers transaction facility only for purchasing movie tickets through their mobile account balance.

Uninor has submitted white paper sought by the RBI for payments banks.

Telenor has also commissioned Boston Consulting Group to study financial services impact in India along with a few other Asian markets.

While talking about Uninor's business in India, Mr Baksaas said that the company has set targets to get half of its total customer base using mobile internet by 2017 through its lowest priced services strategy.

"We have maintained our position in the market as 'Sabse Sasta' (lowest priced) player. In three years' time market will be mature. It will not be difficult for us to achieve 50 per cent internet using customers from 20 per cent as of now," Mr Baksaas said in Delhi.

Telenor Group owns major stake in Uninor and is in the process to completely buyout Indian partners stake in the company.

The new telecom operator offers mobile internet at about 60 per cent less cost than established and old telecom players in the country.

The company has earmarked investment of about Rs 600 crore in its network during the ongoing year.

Uninor had over 4 crore subscribers in six service areas - Andhra Pradesh, Bihar, Gujarat, Maharashtra, UP East and West.The company has bought spectrum for Assam but is yet to start operation there.