RIL said the payments bank licence will “leverage” its telecom business Reliance Jio’s pan-India network and retail arm’s model, even as its tie-up with SBI will help create the most extensive distribution network in India. Also Read - RBI sets up FinTech Department to promote innovation, create policies in fintech sectorAlso Read - RBI introduces new digital payment method that doesn’t need internet: Check details
State Bank of India (SBI), the nation’s largest lender, will hold up to 30 percent stake in the non-lending payments bank of Reliance Industries Ltd. RIL said it has on August 19 received an “in-principle” approval of the Reserve Bank of India (RBI) to set up a payments bank. “RIL and SBI had applied for the Payments Bank licence, with RIL as the promoter and SBI as the joint venture partner with equity investment up to 30 percent,” the company said in a statement. Also Read - RBI reportedly wants a complete ban on cryptocurrencies: No more Bitcoin billionaires in India?
Payments bank licence will allow companies to collect deposits (initially up to Rs 1 lakh per individual), offer Internet banking, facilitate money transfers and sell insurance and mutual funds. Besides, they can issue ATM/debit cards, but not credit cards. RIL was among 11 entities that were granted in-principal approval by RBI for starting Payments Bank. In conjunction, RIL is looking to launch JioMoney, a prepaid payment instrument to facilitate cashless payments across multiple-use cases and build India’s largest digital merchant network. “The Payments Bank formation will deliver all digital banking products and services and co-create an ecosystem to digitize payments (and) promote massive adoption of digital transactions by offering convenience, simplicity and low cost access,” it said.
RIL Chairman and Managing Director Mukesh Ambani said the partnership with SBI will enhance “product capabilities, create the most extensive distribution network in India and drive mass scale digital payments and banking adoption, through an ‘easy to use’ experience driven by technology.” The payments bank, which has not yet been named, will “leverage Reliance Jio’s pan-India telecom network and Reliance Retail’s online and offline business model, to promote the digital ecosystem among all sections of the society across the country,” he said.
Reliance Jio is RIL’s telecom arm which is to start commercial operations by year end. SBI Chairman Arundhati Bhattacharya said, “RIL and SBI, in a ‘first-of-its-kind’ Public-Private partnership (PPP) have joined on a mission to make India’s financial services ‘digitally smart’.” The bank’s vast experience in structuring financial products for different customer segments will be combined with the digital access provided by RIL in completing the most efficient, simple and affordable delivery model with utmost focus on financial inclusion, she said. “The payments bank is integral to RIL’s digital initiative in a rapidly converging world of telecom, internet, commerce, media and financial services. This is one of our many initiatives to contribute meaningfully to the Government of India’s ambitious Digital India programme,” Ambani said……