Cholamandalam Investment decides not to pursue payments bank plan

Cholamandalam Investment decides not to pursue payments bank plan

Cholamandalam Investment and Finance Company Limited has decided not to pursue to set up payments bank. Chola was one of the 11 firms which got inprincipal approval from the Regulator to set up payment banks in the country.

“It was decided that the Company will not pursue the Payments bank opportunity and hence would surrender the in-principle approval accorded by the Reserve Bank of India (RBI) to its wholly owned subsidiary Cholamandalam Distribution Services Limited (CDSL) to establish a payments bank in the private sector,” said the company.

Company's management was not available for comment immediately.

Consequently, the Company will not proceed with the investment / capital infusion of Rs 75 crore in CDSL.

“Further to this, the Board of directors of CDSL at its meeting held later this evening approved resolutions authorising surrender of the in-principle approval accorded to it by RBI for conversion into a payments bank. The Company is intimating RBI of its decision in this regard,” said the company.

Cholamandalam Distribution Services Limited is a subsidiary of Murugappa Group's financial services arm Cholamandalam Investment and Finance Company Limited was one of the firms which got in principle approval to set up payments banks under the Guidelines for Licensing of Payments Banks issued on November 27, 2014. The company said that its focus would predominantly be on financial inclusion and on the MSME sector.

Source:BankingUpdates