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Aditya Birla Payments Bank shuts shop

Barely eight months after launch, Aditya Birla Payments Bank board informed the stock exchanges about the decision to wind up operations.  The payments bank, a venture between Idea Cellular and Aditya Birla Nuvo, has asked its customers to transfer their balances before July 26.

“We will be restricting any further credits (add money) to your account from July 26, 2019,” company officials informed its customers in a note. The company has made full and complete arrangements have been made to return all the deposits.

The Aditya Birla Payments Bank board informed the stock exchanges on July 19 about the decision to wind up operations. The company statement said, “The decision has been taken due to unanticipated developments in the business landscape that have made the economic model unviable.”

The payments bank struggled to garner deposits. As of December 2018, it had mobilised Rs 5.62 crore in a segment dominated by Airtel Payments Bank and Paytm Payments Bank. Overall, payments banks held Rs 780 crore in December 2018, according to a Bloomberg report. Stringent KYC norms and stiff competition were some of the key reasons that led to the winding up of the payments bank.

Aditya Birla Nuvo was granted “in-principle” licenses by the Reserve Bank of India in August 2015, along with 10 other applicants. They were given 18 months to meet regulatory requirements and to receive final licences to launch the payments bank. The apex bank gave out the final licenses to seven out of the eleven payments banks.

Individuals who have an account in the Aditya Birla Idea Payments Bank can transfer the balance through online, and mobile banking modes. You can also approach the nearest banking point for assistance. You can also write to to the bank or call them for assistance.

The payments bank was launched in February 2018. Aditya Birla Nuvo held 51 per cent stake and Idea Cellular held 49 per cent stake in the company.

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