Aditya Birla Group closes its banking business within 2 years of operations

The decision was taken earlier today at a board meeting. The bank will take three months to formally shut down all its operations.

Amol Dethe
  • Updated On Jul 20, 2019 at 12:18 PM IST
Read by: 100 Industry Professionals
Reader Image Read by 100 Industry Professionals
<p>Bank had operations across Mumbai, Chennai, Indore, Lucknow and Hyderabad. </p>
Bank had operations across Mumbai, Chennai, Indore, Lucknow and Hyderabad.

Aditya Birla Payments Bank has decided to discontinue its banking business. According to sources, the Kumar Mangalam-led Birla Group has decided to surrender its banking license to Reserve Bank of India.

As per RBI's website, Aditya Birla Nuvo limited, Mumbai was one of the 11 applicants, which was issued in-principle approval for setting up a payments bank, as announced in the press release on August 19, 2015.

"Sudhakar Ramasubramaniam, the CEO of Aditya Birla Group, informed its employees about the bank’s closure today," said a source. The Aditya Birla Group has diverse interests across metals, textiles, cement and telecommunications.

Advt
The decision was taken earlier during the day (19th July) at a board meeting. The bank will take three months to formally shut down all its operations.

"Lack of funds was the major reason for the closing down of the bank. Along with a non-sustainable business model," said an ex-employee of the bank.

The official statement came after the story was published by the ETBFSI.com.

The release said, "The Board of Directors of Aditya Birla Idea Payments Bank Limited (ABIPBL) has subject to receipt of requisite regulatory consents and approvals, approved the voluntary winding up of ABIPBL. This decision has been taken due to unanticipated developments in the business landscape that have made the economic model unviable."

Aditya Birla Group is committed to protect interests of all stakeholders including customers, employees and business partners. The bank has made full and complete arrangement of funds for return of customer deposits and meeting its all liabilities, it further read.

Aditya Birla Payments Bank (ABPB), a joint venture by Aditya Birla Nuvo and Idea Cellular, was launched on February 22, 2018.

Considering the bank had obtained a payments bank licence, most of its processes were digital. The bank introduced a facility to open an instant, zero balance account. The customers also had a choice to use mobile numbers as bank account numbers.

Advt
"The Bank is taking steps to ensure a smooth closure of all the customer accounts and settlement of their balances. The Bank will continue to be operational for limited banking transactions and will provide a facility to the customers for withdrawing / transferring their balances," the report concluded.

The bank’s app also facilitated the purchase of insurance and other financial products.

Bank had operations across Mumbai, Chennai, Indore, Lucknow and Hyderabad.
  • Published On Jul 19, 2019 at 10:49 PM IST
Be the first one to comment.
Comment Now

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETBFSI App

  • Get Realtime updates
  • Save your favourite articles
Scan to download App