India’s Aditya Birla Payments Bank (ABPB), which began operations around 17 months ago, has decided to shutter operations.
In a regulatory filing, the bank said that its board has approved voluntary winding up of business.
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The statement read: “This decision has been taken due to unanticipated developments in the business landscape that have made the economic model unviable.”
The bank was reportedly struggling to procure deposits from customers, which forced it to take the decision, sources told The Hindu Business Line. It is estimated that ABPB will completely terminate all activities in the next three months.
However, the closure is now subject regulatory approvals. All the existing customers of the bank can transfer their funds from ABPB accounts before 26 July.
ABPB is a payments banks jointly owned by Grasim Industries and Idea Cellular with 51:49 equity stake, respectively.
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By GlobalDataIt is one of the seven banks which received Reserve Bank of India (RBI) licence to launch a payments bank in the country. It commenced its operations in February last year.
As a payments bank, ABPB can take deposits of up to INR100,000 but cannot lend money. These banks are also allowed to offer remittance services, internet banking, insurance, and issue ATM/debit cards.
The introduction of such payments banks into the system was mooted to improve financial inclusion in the country.
