Jio Payments Bank launched

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A 70:30 joint venture between Reliance Industries and the State Bank of India, Jio Payments Bank will be competing against more established players like the two-year-old Airtel Payments Bank, Paytm founder Vijay Shekhar Sharma-promoted Paytm Payments Bank.



The competition in payments bank (PB) space has just heated up further with the entry of Jio Payments Bank Limited. A 70:30 joint venture between Reliance Industries and the State Bank of India, Jio Payments Bank will be competing against more established players like the two-year-old Airtel Payments Bank, Paytm founder Vijay Shekhar Sharma-promoted Paytm Payments Bank, which kicked off last May, and Fino Payments Bank, which followed a month later.



According to The Times of India, H. Srikrishnan, who was earlier with HDFC Bank and Yes Bank, has been appointed MD and CEO of Jio Payments Bank. Reliance Industries reportedly plans to move customers of JioMoney to Jio Payments Bank.

So what are Payments Banks? This is a new bank model visualised by the apex bank in 2013-14 to further financial inclusion. The main difference between this model and traditional banks is that the former can only receive deposits and remittances. PBs cannot offer any financial products, say loans, of their own. Opening an account in a scheduled bank takes time because it requires a lot of documentation and verification. But PBs, being primarily driven by mobile technology, can simplify the process and make it quick and paperless. Furthermore, they can only accept deposits of up to Rs 1 lakh per customer in a savings/current account. Their raison d’etre is to reach out to the unbanked masses, which according to a recent Assocham-EY report is over 19 per cent of