Reliance Industries’ payments bank concern Jio Payments Bank began operations on Tuesday. We take a closer look at three key details about this joint venture between SBI and Mukesh Ambani-run Reliance Industries.
Reliance Industries’ payments bank concern Jio Payments Bank began operations on Tuesday, according to a statement by the Reserve Bank of India. “The Reserve Bank has issued a licence to the bank under Section 22 (1) of the Banking Regulation Act, 1949 to carry on the business of payments bank in India,” RBI said in a statement yesterday. RBI has been pushing Payments Banks to improve financial inclusion through various services such as small savings accounts, payment or remittance services to migrant labourers, low income households and unorganised businesses.
As per current RBI guidelines, the minimum capital requirement for a Payments Bank is Rs 100 crore. Further, for the first five years of operations, the promoters stake cannot fall below 40%. We take a closer look details about Jio Payments Bank.
Joint Venture with SBI
Interestingly, Jio Payments Bank is a joint venture in which billionaire Mukesh Ambani-run Reliance Industries’ has a 70% stake while India’s largest public sector bank SBI (State Bank of India) has a 30% stake. Reliance had first received in-principle approval from India’s apex bank RBI to open a payments bank in August 2015.
3 other prominent players started operations
Notably, Sunil Mittal-led Bharti Airtel was the first to start commercial operations of its Airtel Payments bank in November 2016. The other three payments banks include Paytm Payments Bank, FINO Payments Bank and Aditya Birla Idea Payments Bank. Notably, Reliance Payments Banks was among ten other applicants to receive the in-principle approval.
Deposits below Rs 1 lakh
As the venture is incorporated as a Payments Bank, it can accept deposits only up to Rs 1 lakh. According to current regulations, these banks can accept a restricted deposit, which is currently limited to Rs 1 lakh per customer and may be increased further. Further, these banks cannot issue loans and credit cards. Customers can operate both current account as well as savings accounts.