Jio Payments Bank begins Operations : Highlights

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In a recently released press release, the Reserve Bank of India (RBI) has announced that the Jio Payments Bank Limited has commenced operations as a payments bank with effect from 3rd April 2018. 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.

What is Payments Bank ?

Payments bank is a new model of banks conceptualised by the Reserve Bank of India (RBI) to further financial inclusion by providing small savings accounts and payments or remittance services. A payments bank is like any other bank, but operating on a smaller scale without involving any credit risk. 

In simple words, it can carry out most banking operations but can’t advance loans or issue credit cards. It can accept demand deposits (up to Rs 1 lakh), offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers. Telecom major Bharti Airtel was the first to begin payment bank services in November 2016.

About Jio Payments Bank

Jio Payments Bank is a joint venture of Reliance Industries (RIL) and State Bank of India (SBI). Reliance Industries held a 70 per cent stake in Jio Payments Bank while the remaining 30 per cent was with State Bank of India (SBI).  

H. Srikrishnan, who was earlier with HDFC Bank and Yes Bank, has been appointed MD and CEO of Jio Payments Bank.

Important Note :

Reliance Industries Ltd was one of the 11 applicants which were issued in-principle approval for setting up a payments bank in August 2015. Other 11 are,

• Aditya Birla Nuvo Limited
• Airtel M Commerce Services Limited
• Cholamandalam Distribution Services Limited
• Department of Posts
• Fino PayTech Limited
• National Securities Depository Limited
• Reliance Industries Limited
• Dilip Shantilal Shanghvi
• Vijay Shekhar Sharma
• Tech Mahindra Limited
• Vodafone m-pesa Limited

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