Here is one more addition to the Payment Banks List. Yes…. Jio Payments Bank which is a 70:30 joint venture between Reliance Industries (RIL) of Mukesh Ambani and State Bank of India, is to start its operations from December 2017. The in principle approval for setting up a Payment Bank was received in August 2015.
Though the launch was scheduled in October this year, Jio’s capabilities were to be demonstrated as per RBI instructions, which was to ensure its readiness for a take-off. In fact the launch was planned to be along with delivery of Reliance Industries’ 4G enabled JIO phones, however was delayed due to RBI’s intervention in confirming its readiness to operate which is said to fully compliant for operations now.
How does it work?
- For SBI, JIO bank will operate as a business correspondent
- In unbanked rural areas, SBI will have immediate access to JIO’s customers.
- JIO phones will be linked for UPI based payments and other banking transactions.
- This will also enable JIO to expand its customer base through SBI
- Through launching of JIO Payments, new customers also will be acquired
- SBI has a customer base of 420 million customers and JIO which started its operations in Sept last year has a customer base of around 129 million customers.
- RBI permits payment banks to engage with group entities at an arm’s length to operate as business correspondents.
- Group entities’ employees also can conduct banking activities provided payment bank owns the responsibility for the services offered.
It is believed that delivery of 4G JIO sets starts from Rural areas and small towns before its launch in Urban areas. This will link the digital link between Rural India and Urban India comfortably.