Finance Ministry Arun Jaitley called RBI granting payments bank licences a significant step that will help banks increase their rural reach.

“Payments bank will ensure more money comes into the banking system. Various banks are looking at increasing their rural reach, including big banks like SBI, payments banks will help them realise this,” Jaitley said.

In his first budget last year, Jaitley had announced setting up of such banks that take care of the need of small businesses, households, farmers and migrant work force.

“We are pleased to note that RBI has granted payment bank licence to Reliance Industries in which SBI has proposed a 30 per cent stake,” said  Arundhati Bhattacharya, Chairman, SBI.

This partnership brings together the combined strengths of two of India’s Fortune 500 corporations committed to making a transformative impact on India’s financial inclusion landscape, she added.

Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank, said “We are delighted that Airtel M Commerce Services, where we have agreed to invest 19.9 per cent, has received in-principle approval from Reserve Bank of India for setting up a payment banks.”

Other applicants said they would launch the services ahead of the 18-month deadline prescribed by the Reserve Bank. Paytm founder Vijay Shekhar Sharma, one of the successful applicants, said he would like to start the banking operation ahead of the fixed timeline by the RBI.

“We definitely want to launch the payments bank much earlier than 18 months. We believe that we can go standalone. We won’t need anybody else as far as money is concerned,” Sharma said.

NSDL CEO & MD G V Nageswara Rao said the firm would like “to go alone, but is keeping options open”.

Airtel in a statement said Airtel M Commerce Services will play a pivotal role in bringing millions of unbanked Indians into the folds of banking.