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Jio Payment Bank’s Srikrishnan: “Our consolidated strategy is convergence of telecom, retail and financial services”

H. Srikrishnan, CEO and MD of Jio Payments Bank, reveals the bank’s strategy, planned initiatives and how the bank is building a viable operating model riding on the existing ecosystem of its parent company, Reliance Group

March 04, 2020 | Emmanuel Daniel
  • Jio Payment Bank aims to handle the payment needs, digital recharges and settlement services to over 380 million subscribers of Jio, Reliance’s telecommunication subsidiary
  • The bank’s model focuses on the strengths of its parent group in retail business, telecom and home connectivity, following its consumers’ their everyday banking and bill payment needs
  • Thousands of Reliance Smart Points are planned to have a Jio Payments Bank area within the next two years 

All around the world, several new banks are exploring unique models of payments and transactions opportunities through innovative digital customer service rather than balance sheet lending, but most have yet to show sustained profitability. The viability of these new and pure fee-based innovative financial businesses is yet to be tested in the long run.

In 2015, Reserve Bank of India (RBI) gave in-principle approval to 11 players for new payments bank licences in India, with a directive for unique models aimed at financial inclusion wherein they could not lend or issue a credit card but could accept deposits up to $1,400 (INR 100,000 ) per customer.

Only six payment banks are operational today, the rest either withdrew their licence applications or have shut down their businesses. Despite improvement in net interest income and non-interest income, increases in operating expenses resulted in overall net losses of $87.69 million across all payment banks in 2018-2019. Considering the competition and high costs, these new models need to expand their scale to earn sustainable profits while looking for unconventional revenue models.

A relatively new entrant in this scenario is Jio Payments Bank that started its operations in 2018 as a 70%-30% joint venture between Reliance Industries and State Bank of India. It has strategically positioned itself to ride on the unique ecosystem of its parent company, Reliance Group’s businesses, and provid...

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