Jio Payments Bank, a joint venture between Reliance Industries Ltd (RIL) and State Bank of India (SBI), is planning to launch its banking service in December this year.
Jio Payments Bank, a 70:30 joint venture between Mukesh Ambani-owned RIL and SBI, had secured a payments bank licence from the RBI back in March when it reached the 100-million customers’ mark.
Earlier, it was in the plan to launch its banking services along with JioPhone deliveries in October.
Following the launch, SBI will be leveraging Reliance Jio’s network to reach the last-mile customers.
The payments bank will not be having any dedicated branches as traditional banks do but it will serve customers through Jio retail stores.
“The payments bank was expected to launch its operations in October. The launch got delayed as the RBI had asked them (Jio Payments Bank) to demonstrate its capabilities to ensure it is ready for a glitch-free launch. The launch will now be in December,” said a Jio Official.
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.
At present, Airtel, Fino and Paytm Payments banks are the three entities who have been officially launched and India Post Payments Bank has done a soft launch.
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.
Sudhakar Ramasubramanium, Managing Director and Chief Executive Officer of the yet-to-be-launched Idea Payments Bank, said the issues with payments banks is that it is a daily wage labourer model but no annuity model.