The Reserve Bank of India (RBI) has cancelled the Certificate of Authorisation (CoA) of digital payment wallet Vodafone m-pesa Limited.
The central bank announced the cancellation after the company voluntarily surrendered its CoA.
“Following the cancellation of the CoA, the company cannot transact the business of issuance and operation of Prepaid Payment Instruments (PPI),” said the RBI in a release.
Customers and merchants having a valid claim on the company as a PSO can approach the company for settlement of their claims within three years from the date of cancellation by Sept 30, 2022, the release added.
The development comes five months after Aditya Birla Idea Payments Bank Ltd (ABIPBL) CEO Sudhakar Ramasubramanian announced the shut down after 17 months of operation.
The major reasons for closing were continuing losses, absence of a long-term business case and holistic evaluation of the situation.
Over the years, payment banks model has been in question for its limitation. In the absence of a profitable business model and revenues, many payment banks have shut shop in the past few months.
In 2017-18, payments banks reported collective losses of Rs 516.5 crore.
Launched in 2013, M-Pesa claimed to have over 8.4 million users according to data on Vodafone website dated Jan 5, 2017.
RBI had given Vodafone m-pesa its payments bank licence in 2015.
In May last year, RBI had also imposed a penalty of Rs 3.05 crore on Vodafone m-pesa for violation of regulatory norms.
At present, out of eleven payments banks, only five – Paytm, Airtel, Fino, Jio and India Posts – are operational payment banks.