Jio Payments Bank Aims To Time Launch With JioPhone Deliveries
Reliance Jio to launch payments bank along with JioPhones.
Jio Payments Bank Ltd., majority owned by Mukesh Ambani’s Reliance Industries Ltd., plans to launch its banking services when JioPhone deliveries begin in October, a senior company official told BloombergQuint requesting anonymity.
The bank will not have any specialised branches and will service its customers through Jio retail outlets, where they can also get JioPhones, new SIM cards and other network services, the official said.
The payments bank, a 70-30 joint venture between RIL and India’s largest lender State Bank of India, received a final banking licence from the Reserve Bank of India in March. The central bank introduced such lenders to provide low-cost banking services to improve financial inclusion. Like small finance banks, they rely on technology and a frugal business model to reduce costs.
JioPhone, a 4G-enabled feature phone that Ambani unveiled in July, allows users to link the device for UPI-based payments and other banking transactions and also comes with near-field technology. Preorders had to be halted after they began in August due to high demand.
RIL had first received an in-principle approval from the central bank to open a payments bank in August 2015, along with 10 other applicants.
Under the operational guidelines announced in October 2016, the RBI allowed payments banks to engage with group entities at an arm’s length basis to operate as business correspondents. They can also allow employees of the group entity to conduct banking activities, provided the payments bank remains responsible for all such activities.
The RBI also eased branch banking norms by changing the definition of a bank branch in May. The central bank introduced a new category called the ‘banking outlet’, which conducts banking activities for at least four hours a day, five days a week. These outlets could be manned by the bank’s staff or even its business correspondents.
Payments banks, though, have had a slow start. Aditya Birla Nuvo Ltd., Vodafone m-Pesa Ltd. and National Securities Depository Ltd. didn’t launch banking services even two years after receiving initial approvals. Bharti Airtel Ltd. and India Post have already launched operations.
Of the 11 which originally received an in-principle approval from the RBI, three including Tech Mahindra Ltd., Cholamandalam Distribution Services Ltd. and Dilip Shanghvi have opted out. In comparison, all 10 small finance banks which received the in-principle approval around the same time are now operational.
Also Read: How ‘Smart’ Is Mukesh Ambani’s JioPhone?