PTI
Mumbai
Mahindras Tuesday became the third entity to drop out of the payments bank race, saying business profitability would take longer time due to “aggressive posturing” by many deep-pocketed players.
Tech Mahindra is the third applicant to abandon the plan to set up payments bank after Cholamandalam which quit last month and Dilip Shanghvi-IDFC Bank-Telenor combine last Friday.
“Over a period of time, we have realised that the amount of aggression that has come into the marketplace only erodes the margins,” Tech Mahindra managing director and chief executive C P Gurnani told reporters, after its board decided not to pursue the opportunity.
After the Reserve Bank had given in-principle approval for payments banks to TechM and 10 others last August, it had said group company Mahindra Finance would be an equal partner in it.
Gurnani said profit margins were always supposed to be “razor thin” in the payments bank business, but the aggressive posturing by competition which has the who's who of the telecom world, including the Ambanis, the Birlas, Airtel and Vodafone, among others, only made it realise that “business profitability will take a much longer period”.
