Mukesh Ambani-backed Reliance Industries' (RIL) new venture Jio Payments Bank Limited started operations Tuesday, April 3, Reserve Bank of India (RBI) said in a release.
RIL was one of the 11 applicants that were issued an in-principle approval for setting up a payments bank by RBI. Bharti Airtel, Tech Mahindra, Reliance Industries and Vodafone were the big names in the list of applicants who got RBI's nod.
Among these, only five — Jio, Airtel, India Post, Fino Paytech and Paytm — have set up payments banks so far.
Here are the basic details about Jio Payments Bank Limited:
- Jio Payments Bank Limited is a 70-30 joint venture between Mukesh Ambani's Reliance Industries Limited and state-run State Bank of India (SBI)
- While commercial banks in India can lend, Jio Payments Bank cannot lend, which is the norm for all payments banks
- Jio Payments Bank cannot collect deposits exceeding Rs 1 lakh
- Unlike regular banks, payments banks are not allowed to issue credit cards to customers. However, they can issue debit cards. And this goes for Jio Payments Bank as well
- For opening an account with the Jio Payments Bank, the customer needs to submit their 12-digit Aadhaar number
- H Srikrishnan, former head of Transactional Banking and Operations of HDFC Bank and Yes Bank, has been appointed MD and CEO of Jio Payments Bank
- RIL plans to move customers of JioMoney to its payments bank
- Jio Payments Bank's interest rates on deposits are yet to be announced
Telecom major Bharti Airtel was the first to begin payments bank services in November 2016. After that, Vijay Shekhar Sharma-promoted Paytm Payments Bank began operations in May 2017 while Fino Payments Bank Limited was launched in June last year.
Besides private firms, the Indian Postal Department is also in the fray. India Post Payments Bank (IPPB) is preparing to commence its full-fledged operations soon. It has started pilot services in some districts across the country.
The entry of Jio Payments Banks into the market may make operations difficult for the payments banks of Airtel and Paytm.
Jio Payments Bank begins its operations at a time when Airtel Payments Bank has been temporarily suspended. In March, the RBI even imposed a fine of Rs 5 crore on Airtel Payments Bank for breaching operating guidelines and Know Your Customer (KYC) norms.
Meanwhile, Paytm is facing heat from several business verticals as the mobile wallet firm fears it will lose a large portion of its user base because of the mandatory KYC norms.
