Reliance Industries Signs Joint Venture With SBI To Set Up Payments Bank

Mumbai: Indian conglomerate holding company Reliance Industries (RIL) and financial services company State Bank of India (SBI) have signed the shareholder agreement to set up the payments bank joint venture.

In a Bombay Stock Exchange (BSE) filling on Friday, RIL said, “The Subscription and Shareholders’ Agreement was signed by RIL as promoter with a 70 percent equity contribution and SBI as joint venture with a 30 percent equity contribution on June 30, 2016.”

In February 2015, RIL and SBI had entered into a non-binding memorandum of understanding to set out the principal terms. This would bring together the nation's largest banking network and pan-India telecom and retail setup, the filing said.

RIL and SBI put in a joint application to the Reserve Bank of India (RBI) to set up a payments bank that can offer services such as remittances and deposits but not loans. RBI granted in-principle approval to RIL as a promoter in September 2015 for the setting up of the payments bank.

Mobile phone carriers, retailers and prepaid payment card issuers are among those who have been granted payment bank license last year. Airtel M Commerce Services Ltd, Aditya Birla Nuvo, Vodafone m-pesa, Tech Mahindra and Department of Posts are among those who won RBI approval to set up such niche banks.

The filing further said, “By combining RIL’s technology, last mile reach and distribution through RIL’s telecom and retail initiatives and SBI banking expertise in offering financial services to millions of retails customers and small enterprises across the country.”