State Bank of India will review its partnership with Mukesh Ambani-backed Jio for launching payments bank operations. The joint venture was announced in 2018, but four years later, the venture is yet to be launched.
Speaking to Business Line, State Bank of India Chairman Dinesh Kumar Khara said, “Payment bank per se has undergone so many changes. So that is perhaps the reason why it has never really gone full fledged. Maybe, they (Jio) have also kept on changing their technology, they are studying. On our investment, as of now, we have not taken any call on this. The timeline till 2023 is some time away. The landscape is changing very fast. We will see what plan of action to take.”
In 2018, the Reserve Bank of India issued a licence to Jio Payments Bank to carry on the business of payments bank in the country. Payments banks offer limited banking services such as savings accounts. Such banks cannot provide loans or credit cards to their customers. SBI holds a 30 per cent stake in the venture.
In FY21, the payments bank was fined ₹1 crore by the RBI for the delay in applying for reappointment of its managing director and chief executive. In general, payments banks have struggled to be a viable business model, with many large players dropping their plans to acquire a licence.