Jio Payments Bank Will Launch In December 2017; Will Partnership With SBI Bear Results?
This partnership between Reliance and SBI is being called 'Mother of all JVs'!
Latest reports have just come in, which informs us that Jio-SBI’s Payments Bank will be launched by December this year. Earlier, it was planned that this joint venture would launch their Payments Bank operation by October, along with the launch of Jio Phones.
However, due to some issues related with testing of the operations, the launch got delayed, and December has been set as the final month of launch.
However, the main question which pops up now: Will this ‘mother of all JV’, this partnership between Reliance Industries, which is India’s most valued private company, and SBI, which is the biggest bank in India, will work?
We explore..
Jio Payments Bank: Launch In December This Year
Along with Paytm, Airtel and 8 other entities, RBI had approved the license of Payments Bank to Reliance Industries as well, in August 2015.
Only Airtel and Paytm has been able to launch their Payments Banking operations as of now.
Last year, Reliance collaborated with SBI to create a 70:30 joint venture, with Mukesh Ambani backed Jio commanding lion’s share.
After October deadline was passed, it has now been revealed that the payments bank would launch in December. The delay has been caused that RBI wants glitch-free operations, and things are being worked out.
A person who is close to the developments shared: “The payments bank was expected to launch its operations in October. The launch got delayed as the RBI had asked them (Jio Payments Bank) to demonstrate its capabilities to ensure it is ready for a glitch-free launch. The launch will now be in December,”
Another person who is close to the development of this Jio-SBI Payments Bank has said that RBI wants no operational inefficiency, and the operations are being perfected before the launch.
So, right now, both Jio and SBI are trying to comply with strict RBI guidelines.
Jio + SBI: The Mother Of All Partnerships
Last year, in November, Jio and SBI formally incorporated the joint venture, which is pretty historical in several ways.
While Reliance Industries is India’s biggest private company, SBI is the largest bank in India.
And both the entities are looking forward to leveraging maximum ROI from this iconic partnership.
This is how it will work:
Reliance Jio has expanded their base pretty fast, crossing 100 million mark in May this year. As of now, Jio has close to 130 million customers.
Now, SBI wants to leverage Jio’s massive network to provide last mile connectivity to rural customers, who are living in deep rural hinterland, and have no access to banking.
Like Paytm and Airtel, Jio’s payments bank will be primarily based on the mobile, and it is an excellent opportunity for SBI to expand their services using the mobile platform of Jio.
On the other hand, SBI is the largest bank, with an army of banking experts, and decades of experience in banking.
Jio, which has nil experience in this regard, will use SBI’s experience, and their massive 420 million user base of banking customers to expand their services. (Jio has launched Jio Money wallet, but their experience in banking is zero)
Hence, in a way, 420 million banking customers of SBI and 130 million Jio customers would be combined in this the new joint venture, and the opportunities seems immense.
We will keep you updated as we receive more information.
