The RBI (Reserve Bank of India) stated that the Jio Payments Bank Ltd, from April 3, 2018, has initiated functioning in India. In a statement, the central bank of the country said, “The Reserve Bank has given a license to the bank within the Banking Regulation Act, 1949’s Section 22 (1) to keep on the commerce of payments bank in the country.”

Reliance Industries Ltd, Mumbai, as per the RBI, was among the 11 candidates that were given in-principle consent for starting off a payments bank. With a joint venture of 30:70 between the State Bank of India and Reliance Industries, the Jio Payments Bank will be contending against more recognized players such as Paytm Payments Bank that is promoted by the founder of Paytm, Vijay Shekhar Sharma, which initiated last May, the Fino Payments Bank that trailed a month later, and the 2-year-old Airtel Payments Bank.

Conceptualized in 2013–14 by RBI, the payment banks are intended for further expanding the financial inclusion by offering small savings accounts and disbursements or remittance services. The key distinction between this prototype and conventional banks is that the first can only accept remittances and deposits. Payment banks cannot provide any financial solutions such as loans of their own. The payment banks, impelled by the mobile technology, make the documentation process for account opening simpler.

Moreover, they can only receive deposits in a current/savings account of up to Rs 1 Lakh per consumer. Their core rationale is to stretch out to the unbanked public that as per a latest Assocham-EY report is more than 19% of our populace. However, Interest rates for Jio Payments Bank of Mukesh Ambani are yet not known.

Captivatingly, as per the reports, 2 other potential payments banks are about to emerge in the prospect—to be proposed by Vodafone M-Pesa and National Securities Depository.