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Now, Foxconn looks to set up payments bank

Taiwanese technology major Foxconn, which has already lined up $20-billion (Rs 1.3 lakh-crore) investment plans for India, is now looking to set up a payments bank in the country.

business Updated: Aug 30, 2015 23:51 IST
M Rajendran
M Rajendran
Hindustan Times
Foxconn,Payments bank,Foxconn investments in India
The logo of Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company's headquarters in Tucheng, New Taipei city. (Reuters Photo)

Taiwanese technology major Foxconn, which has already lined up $20-billion (Rs 1.3 lakh-crore) investment plans for India, is now looking to set up a payments bank in the country.

According to top government sources, the iPhone maker is also eyeing possible investments in tech startups, data analytics, medical device manufacturing and logistics business.

The RBI recently granted approval to 11 companies/indviduals to set up payments banks. Vodafone, which is a British telecom giant, is also one of them.

The foreign shareholding in payments bank will be according to the FDI policy for private banks — up to a maximum of 74% of the paid-up capital of banks (up to 49% through the automatic route and beyond that by approval).

"There won’t be one big announcement, but many over time," Foxconn Technology founder and CEO Terry Gou had said at his maiden press conference in New Delhi last month.

Investments in handset maker Micromax and consumer electronics giant Videocon before the year-end are also on the cards.

Email sent by HT to Foxconn’s media department and Gou’s office went unanswered.

"We attract a lot of global partnership proposals, but we cannot comment on speculation," a Micromax spokesperson said.

"The investment in payment banks is confirmed and modalities and the partner are being firmed up... the investment in two Indian companies in electronics is targeted to be completed by 2015 end," according to an official, who represented Foxconn at various meetings with the government.

These new sectors are in addition to the company’s planned investments in India.

Some of Foxconn’s investments in India include a $5-billion TV manufacturing unit in Chennai with Sony, a $5-billon thin-film transistors and semiconductor manufacturing plant in Maharashtra, and Whistling Woods International, the media art technology school promoted by Bollywood director Subhash Ghai for content creation.

"We are married to India," Gou had said at the press conference.

Foxconn is focussed on Andhra Pradesh, Telangana, Maharashtra, Gujarat, Karnataka and Rajasthan, a senior official in Department of Industrial Policy and Promotion said. "They have not made any enquiry about other states yet. But they have undertaken studies with local authorities," he added.

"India is slowly replacing China as a manufacturing and market destination... more companies will follow if policies are implemented as spelt," said Chiranjit Banerjee, founder of PeoplePlus, a management consulting firm.

That is also the concern that Gou has often referred to.

"Your infrastructure will be a big limitation. Today I was told it will take 20 minutes to reach you, but it took 1 hour 20 minutes because it rained," Gou had told NDTV in an interview. Power is a problem, he added.

"The Centre has to ensure that these bottlenecks are removed quickly... China will not be down for long," said Jaijit Bhattacharya, partner, infrastructure and government services, KPMG India.

This is Foxconn’s second innings in India. It suspended operations at its Chennai unit in February after the plant, operated by Nokia, was caught in a legal wrangle, following Nokia’s sale of its services division to Microsoft.

First Published: Aug 30, 2015 23:46 IST