Once it bags payments bank license, Itzcash looks to raise Rs 500-600 cr

Itzcash promoter Ashok Goel has already committed Rs 100 crore fresh investment for the company to become eligible for a payments bank license. Once the license is through, Itzcash will look at raising Rs 500-600 crore for expanding operations further, says Managing Director Naveen Surya. The Reserve Bank of India had stipulated that a payments bank requires minimum paid-up equity capital of Rs 100 crore and Goel’s commitment helps the company meet this requirement. [caption id=“attachment_2150381” align=“alignleft” width=“580”]  Reuters[/caption]Itzcash is one of the 40 odd applicants for a payments bank license; this license will enable the company to offer services like the semi-closed wallet and an open loop wallet. Put simply, this license will enable it to hold a user’s money to pay other merchants and enable the user to use ATMs of other banks for transactions. This license will also obviously build trust with customers. Launched in 2006, Itzcash is part of the Essel Group and claims to be India’s largest non-banking entity to offer pre-paid cash cards besides also offering mobile wallet facilities. Surya claims Itzcash has about 88 million customers of which which 30-35 million are “unique” customers. “Having acquired these customers, we want to now get into domestic and international remittances for them, offer them banking services and products such as insurance. We already have over 50,000 touch points, the only thing lacking is a payments back license,” he says. Competitors like Mobikwik (another mobile wallet firm) are also in the fray for such a license and have said earlier that the license will enable them to turn a wallet user’s account into a full fledged savings account. This means mobile wallets can then earn customers some interest on deposits and they will get other facilities like cash withdrawal at ATMs too. The biggest fallout of a license would be a test of promises being made by license aspirants like Itzcash, Mobikwik and others about aiding the Government’s plans for financial inclusion - since a payments bank will also allow users to withdraw cash without having an existing bank account. Apart from Mobikwik and Itzcash, other mobile wallet companies like Oxigen are also applicants for a payments bank license. Paytm’s Vijay Shekhar Sharma has applied in his personal capacity. Surya said Itzcash has raised $20 million over the last five years and investors in the company include Matrix Partners, Lightspeed Venture Partners and Intel Capital though Goel owns majority stake. He did not disclose details of the additional Rs 500-600 crore investment Itzcash is looking to raise once it bags the payments bank license.