One of the most-awaited entrants in the payments bank sector — Jio Payments Bank Ltd, a joint venture of Reliance Industries Ltd, and State Bank of India, was incorporated on November 10, according to documents filed with the Registrar of Companies (RoC). In September 2015, the payments bank had received an in-principle approval from the Reserve Bank of India, with a validity of 18 months, within which it was to be set up.
The newest entrant in the country’s telecom sector Reliance Jio, already operates a prepaid wallet under the Jio Money brand, and the Jio Payments bank was incorporated only two days after Prime Minister Narendra Modi announced the decision to discontinue Rs 500 and Rs 1,000 currency notes. According to industry experts, the Jio Payments Bank would leverage Jio’s mobile subscriber base and SBI’s vast network.
As per the RoC filings, Jio Payments Bank has seven directors on its Board, including H Srikrishnan, who is also the CEO designate at the payments bank, Alok Agarwal and SBI’s deputy managing director of (Corporate Strategy & New Business) Manju Agarwal, who is also on the board of National Payments Corporation of India.
Apart from these, the Board also consists of chief executive officer of financial advisory firm Moelis India, Manisha Girotra, who is also on boards of Mindtree and Ashok Leyland, Rajendra Kumar Saraf, who is a board director for Itz Cash Card.
Sethurathnam Ravi, who is a director on boards of several other companies such as IDBI Bank Ltd, BSE Ltd, Aditya Birla Health Insurance Co Ltd, BOI Merchant Bankers Ltd, along with president of IIHMR University Vivek Bhandari, are also on the board of Jio Payments Bank.
An e-mail query to RIL seeking comments on the launch date of the payments bank did not elicit any response.
On November 23, Airtel Payments Bank became the first to go live, out of the eight companies who have proposed the launch of payment banks. These include Jio Payments Bank, Paytm Payments Bank, India Post Payments Bank, NSDL Payments Bank, Aditya Birla Idea Payments Bank, Fino PayTech, and Vodafone m-pesa.
The Airtel Payments Bank, within two days of its pilot going live in Rajasthan, over 10,000 customers opened savings account with it. However, the road to setting up of a payments bank ecosystem in India has not been smooth.
After 11 entities received in-principle nod, three of them — a consortium of Sun Pharmaceutical promoter Dilip Shanghvi, IDFC Bank Ltd and Telenor Financial Services, Tech Mahindra, and Cholamandalam Investment and Finance — backed out on their plans.
Tech Mahindra, upon dropping its plans, said that competition in the sector would only erode its already thin margins.