29/01/2015 9:55 PM IST | Updated 15/07/2016 8:24 AM IST

Bharti Airtel To Apply For Payments Bank Licence

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The logo of Bharti Airtel Ltd. is displayed on a parasol in Mumbai, India, on Wednesday, Jan. 29, 2014. India got bids totaling 446.1 billion rupees ($7.12 billion) on the first day of a wireless spectrum auction on Feb. 3, the third effort by the government to raise revenue from the sale of airwaves in the last 15 months. Photographer: Dhiraj Singh/Bloomberg via Getty Images

Bharti Airtel said on Thursday its mobile commerce unit will apply for a payments bank licence which will allow India's biggest telecom network carrier to offer basic banking services like remittances and deposits, but not lend money.

If the company gets a licence, Kotak Mahindra Bank will buy a 19.9 percent stake in Bharti Airtel's wholly-owned subsidiary, Airtel M Commerce Services Ltd (AMSL), as an investor, it said in a statement.

India has set a Feb. 2 deadline for applying for these licences. Payments banks, led by mobile operators and pre-paid specialists with existing networks, are expected to bring financial services within the reach of hundreds of millions of people.

AMSL, set up in June 2010, provides mobile commerce services.

Payment banks will be allowed not only to accept cash, but also to pay it out. The prepaid payment instrument license holders are not.

Airtel is the first major network carrier to announce its application for these licences, which are expected to be a cornerstone in the Narendra Modi government's push for financial inclusion.