Vodafone Idea is shuttering both its m-Pesa operation and the Aditya Birla Idea Payments Bank as it looks to forge partnerships in the financial technology sector.
The operator’s CEO Balesh Sharma announced at its Q1 earnings call that the payments bank, formerly aligned with Idea’s branding, had ceased to be economically viable. He noted that the decision to wind up the two units factored in the difficulties facing India’s telecoms sector as well as new banking regulations.
Vodafone Idea had initiated a merger between the payments bank and its m-Pesa unit. With both now being shuttered, the operator has incurred an impairment charge of INR2.1 billion ($30.5 million).
The Abitya Birla Idea Payments Bank was set up in response to a government initiative aimed at encouraging Indians to save via financial services. However, such services have proven controversial, with similar offerings from Bharti Airtel and Paytm temporarily discontinuing services last year after falling afoul of regulators.
Sharma said that the operator was not abandoning the financial services sector and was actively pursuing partnerships.