Mobile payments company Vodafone M-Pesa has applied for an extension on its prepaid payment instrument license while it explores merging with an associate or third party company.
Vodafone M-Pesa, which is wholly owned by India's Vodafone Idea, is seeking an additional extension of its license from the Reserve Bank of India, the Economic Timesreported.
The company will be required to pursue a merger due to regulations preventing one entity from having a payments banking business and prepaid payments business under separate entities.
Due to the merger between Vodafone India and Idea Cellular, the combined Vodafone Idea currently has a 100% stake in Vodafone M-Pesa as well as a 49% shareholding in the Aditya Birla Idea Payments Bank Limited.
The company has already negotiated multiple extensions to its prepaid payment instruments, but only on a temporary basis as the company pursues a solution to gain compliance with the regulations.