RIL Joins Hands With SBI, Hopes To Get Payments Bank Licence

Reliance Industries Limited (RIL) has said that it has applied for a payments bank licence in collaboration with the State Bank of India (SBI), which would have up to 30% stake in the joint venture (JV).

Earlier, Aditya Birla Nuvo Limited (ABNL), which manages mobile operator Idea Cellular, and the Future Group had also applied for licences. According to ABNL, it is eyeing to own 51% in the bank and Idea will own the rest.

The Reserve Bank of India (RBI) would ultimately take a final decision on these applications.

Some of the applicants, including Aditya Birla Group, had also applied for full-fledged banking licences in 2013. However, their applications were rejected by the RBI.

The RBI had issued licences to Infrastructure Development Finance Company (IDFC) and Bandhan to set up full-fledged banks in 2014.

Muthoot Fincorp, which was looking to apply for a small finance bank, has now backed out. "The RBI guidelines say we have to convert the current business into small finance business. We are not sure how it will play out," said Muthoot Fincorp Executive Director Thomas Muthoot.

Payments bank is allowed to raise deposits of up to Rs 1 lakh per individual. It can also issue ATM cards and sell products like mutual funds. However, they are not allowed to issue credit cards.
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