On the lines of China’s Ant Group, Amazon, Flipkart and Paytm, Tata proposes to launch a super-app. It is going to be a digital megastore where a user can buy anything, from groceries to fashion apparel to medicines. The digital arm of the Tatas is called Tata Digital.

Tata Digital is looking for tie ups with licensed banks and insurance companies to offer financial intermediation. They may offer services such as credit cards, insurance, micro loans, merchant management, fintech etc. Tata Digital may acquire even a neo-bank. Neo-banks aggregate financial services through digital only platforms. RBI has yet to recognise them as a separate class of banking intermediaries. RBI may spell out the rules governing such entities soon.

Neo-banking sector in India has seen much action of late. There are startups called Razorpay, Open and Niyo. They have tied up with licensed lenders. This practice is allowed by the RBI. Revolut is the world’s largest neo-bank. It is UK-based. Open is negotiating with Amazon, Google and Visa. Amazon and Flipkart too have set up separate fintech and neo-banking divisions.

Tata Digital would be at an advantage. They already operate an NBFC and AMC. They also have insurance companies. The neo-digital arm could bundle up all these services. They may opt for even a banking license. They have tied up in the meanwhile with some banks and organisations to apply for a New Umbrella Entity (NUE) license. It is for a pan-India retail payments network.