RIL-SBI payments banks to push digital banking

RIL has entered into a partnership with State Bank of India for payments banks

Reliance Industries (RIL), which has been granted a payments bank licence by the Reserve Bank of India (RBI) believes the new bank will be able to push the digitisation of payments in the country. RIL has entered into a partnership with State Bank of India (SBI), the country’s largest lender, for a payments bank. While RIL Is the promoter, SBI will be the joint venture partner with equity investment of 30 per cent.

They believe the formation of payments banks will help in delivering digital banking products and services and will also help in promoting adoption of digital transactions by offering simple products conveniently and at a low cost.

“The payments bank is integral to RIL’s digital initiative in a rapidly converging world of telecom, internet, commerce, media and financial services,” Mukesh Ambani, RIL chairman and managing director, said.

The new bank will be able to leverage Reliance Jio’s telecom network and retail business’ online and offline presence. On the other hand, SBI will help in enhancing product capabilities and also provide a strong distribution network.

“RIL and SBI, in a first-of-its-kind public-private partnership, have joined on a mission to make India’s financial services digitally smart. SBI’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,” said SBI Chairman Arundhati Bhattacharya.

The payments banks will mainly be involved in remittance services, will be allowed to accept deposits up to Rs 1 lakh but cannot lend. Also, these banks will have to deploy funds in government papers and bank deposits.

Apart from Reliance, 10 other applicants were granted the payments banks licence by the regulator. These other entities include- Aditya Birla Nuvo, Airtel M Commerce, Cholamandalam Distribution, Department of Posts, Fino PayTech,, National Securities Depository Limited, Tech Mahindra Limited and Vodafone m-pesa Limited. Two individuals have also been awarded licences — Dilip Shantilal Shanghvi and Vijay Shekhar Sharma.