Reliance - SBI Payment Bank Launch will be delayed

MUMBAI: The launch of State Bank of India's (SBI) much-awaited payments bank has been delayed further, because its private partner wants to first launch its mobile telecom business Reliance Jio, wait for it to stabilise before launching the payments bank, two people familiar with the matter said.

"Reliance-SBI payments bank launch will follow the commercial rollout of Jio," a source involved in the rollout plans said. "The plan is to leverage Jio's telecom network to offer services to its banking clients."

However, RILBSE -1.04 % has denied having delayed the launch and said that things were going as per the plan in an email to ET.

"We are currently going through the process for regulatory nods to operationalize the payments bank," an RIL spokesperson said, "While we await RBI to revert on our submissions, we are following a defined regulatory process."

The payments bank is expected to be aligned with Jio's pan-India network and will offer 4G-based banking services to its customers. While Jio is expected to have a Diwali launch, the payments bank launch is likely only after a couple of months later, the source quoted above said.

"RIL has applied to RBI and a full-fledged license is expected soon," another source said. "This model is most suitable for telecom operators. Hence, there will be a lot of synergy with Jio telecom."

Jio is expected to have half-a-million activation outlets and close to a million recharge outlets at launch. The outlets are expected to be connected "real-time" to the 1,072 Jio offices set up across the country , according to a PTI report.

In July this year, RIL and SBI signed a shareholder agreement under which the promoter will own 70 per cent, while the banking partner will own a 30 per cent stake. SBI, which will remain an investor under the arrangement, will meet credit requirements of the payment bank customers.

A year after the RBI gave in-principle nod to 11 applicants to set up payments banks, three entities have dropped out and not a single applicant out of the remaining eight has rolled out its services.

In May this year, Airtel M Commerce became the first entity to be issued a payments bank licence.

Source: Economic Times