Jio Finance to buy entire SBI Stake in Jio Payment Bank

The Jio Financial Service Limited board has approved the purchase of 7.9 cores of shares of the Jio Payment bank from the State Bank of India for Rs 104.54 crore. At present, the State Bank of India holds 17.8 % shares in the Jio Payment Bank.

According to Jio Financial Services Limited, if the proposal is approved by the Reserve Bank of India (RBI), then the whole process will be completed within 45 days of RBI approval.

RBI is the regulator of the Payment Banks in India.

SBI approves sale of its stake in Jio Payment Bank 

• Jio Payment Bank is a joint venture of Jio Financial Service Limited and SBI, and it started its operation in April 2018.
• Jio Financial Services Limited holds 82.17% of the paid-up equity share capital of Jio Payments Bank Limited, while SBI holds 17.8 % of the shares.
• Earlier, the executive committee of the Central Board of Directors at SBI approved the divestment of the bank's entire stake in Jio Payments Bank Limited to Jio Financial Services for Rs 13.22 per equity share, resulting in a total of Rs 104.54 crore. 
• If the deal takes place, then Jio Financial Services Limited will become the 100% owner of Jio Payment Bank.

Headquarters of Jio Payment Bank: Mumbai 

Chairman and Managing Director: Vinod Easwaran 

Payment Banks in India 

Payment Banks were set up in India on the recommendation of the Nachiket Mor committee  on “Comprehensive Financial Services for Small Businesses and Low-Income Households.”

Airtel Payment Bank was the first to start operations in 2017, and at present, there are five payment banks- Airtel Payments Bank, Fino Payments Bank, India Post Payments Bank, NSDL Payments Bank, and Jio Payments Bank- in India.

All the payment banks are private banks and licensed by the RBI under the Banking Regulation Act 1949. 

• The payment banks can offer only demand deposits i.e, saving accounts and current accounts, to the public. 
• They cannot offer time deposit -i.e, recurring deposit and time deposit to the public. 
• Issuing a passbook to an account holder is not mandatory for Payment Bank.
• The maximum deposit allowed is Rs 2 lakh.
• The Payment Banks cannot provide loans or credit cards to the account holders. 
• They have to follow the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)  as applicable on the commercial banks.
• The minimum paid-up equity capital requirement for the payments bank is Rs. 100 crore. 

Jio Financial Services Limited 

• Jio Financial Services was demerged from Reliance Industries Limited in 2023.
• The company is a non-banking finance company (NBFC) that operates in the areas of financing, investing, insurance broking, payment banking, payment aggregator, and payment gateway services.

Chairman and Managing Director: Hitesh Kumar Sethia

Headquarters: Mumbai