Indian conglomerate Reliance Industries Ltd (RIL) and State Bank of India (SBI), the country’s largest lender, have completed a shareholders’ agreement for setting up their payments bank joint venture.
“The subscription and shareholders’ agreement was signed by RIL as promoter with a 70% equity contribution and SBI as joint venture with a 30% equity on June 30, 2016,” RIL confirmed in a statement.
“All requisite regulatory and statutory approvals will now be sought for operationalising the payments bank,” RIL added in a filing to the Bombay Stock Exchange (BSE).
RIL and SBI entered into a non-binding memorandum of understanding (MoU) in February 2015 to set out principal terms for the venture.
The Reserve Bank of India (RBI) last year gave in-principle approval to 11 entities, including RIL, to open payments banks to widen the reach of banking services and push the goal of financial inclusion promoted by the government of Narendra Modi.
RIL and SBI submitted a joint application to the RBI to establish a payments bank that can offer services such as remittances and deposits but not loans. RBI granted in-principle approval to RIL as a promoter in September 2015 for going ahead
“By combining RIL’s technology, last mile reach and distribution through RIL’s telecom and retail initiatives and SBI’s banking expertise in offering financial services to millions of retail consumers and small enterprises across the country, the payments bank will work toward digitizing payments and promoting digital savings and investments products by creating a cash-less society,” RIL said.
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