Jio Payments Bank receives RBI nod
Jio Payments Bank (JPB), a joint venture between State Bank of India and Reliance Industries Limited, has received the crucial go-ahead from the RBI. According to people in the know, JPB is expected to commence its operations by April 1, 2017. This is third payment bank to be announced in recent months: debut was made by Airtel Payments Bank followed by Paytm.
What is a Payments Bank?
Payment banks are trimmed down versions of banks which can receive payments, remittances, offer basic saving and deposit services, etc. However, unlike full-fledged banks, payment banks cannot advance loans or issue credit cards. The concept of payment banks was mooted to further goal of financial inclusion as normal banks have restrictions in terms of reach and access to people, especially in remote areas.
RIL and SBI come together for 'Payments Bank'
In July 2016, Reliance Industries Limited (RIL) and SBI made their collaboration official by signing subscription and shareholders' agreements to set up a payments bank. RIL and State Bank of India, will hold 70 and 30 percent respectively.
Looking into the future
Reliance Jio acquired 100 million-4G mobile customers in 6 months. According to a finance firm's MD, "To attract customers, RIL may bundle its Jio plans with transaction offers on the payments bank platform." He added, RIL may sell financial and insurance products to boost revenue and could offer banking services to its current and new customers by leveraging merchant tie-ups, Jio retailers and e-tailers.
No information on interest rates
The payment bank can be integrated through IMPS and NEFT allowing people from normal banks to transfer/receive money from payment banks. However, there is no information yet on interest rates or other guidelines pertaining to Reliance Jio payments.
