NEW DELHI (TIP): Kotak Mahindra Bank on Tuesday said that it has bought 19.90% stake in Airtel M Commerce Services Ltd (AMSL) for Rs.98.38 crore to set up a payments bank.

AMSL was one of the 11 entities that were given an ‘in-principle’ approval in August 2015 by the Reserve Bank of India for a payments bank. Kotak Mahindra Bank had announced in January 2015 its intention to buy a stake in the Bharti group’s company.

AMSL was incorporated in April 2010 as a 100%subsidiary of Bharti Airtel Ltd. It is in the business of providing the service of semi-closed prepaid instrument and offers services under the ‘Airtel Money’ brand name.

Total revenue of AMSL in 2014-15 was Rs.121.4 crore, up from Rs.42.6 crore in the previous financial year, according to Kotak Mahindra Bank’s filing to the BSE.

Other entities that got in-principle approval to open payments banks included Aditya Birla Nuvo Ltd, the Department of Posts, Reliance Industries and Dilip Shanghvi Family and Associates.

Reliance Industries Ltd has entered into a partnership with the State Bank of India while Dilip Shanghvi Family and Associates, the personal investment firm of Sun Pharmaceutical Industries Ltd founder Dilip Shanghvi, has tied up with Norwegian telecom entity Telenor and IDFC Ltd to start a payments bank.