Jio Payments Bank starts operations from Tuesday after RBI nod1 min read . Updated: 03 Apr 2018, 10:11 PM IST
The Reserve Bank of India has issued licence to Jio Payments Bank Ltd to carry its business in India, RBI said in a press release
New Delhi:Jio Payments Bank Ltd started operations on Tuesday, the sixth payments bank since the central bank gave in-principle approval to 11 applicants in August 2015.
The launch comes within a month of Aditya Birla Idea Payments Bank starting operations on 22 February.
“Jio Payments Bank Ltd has commenced operations as a payments bank with effect from April 3, 2018. The Reserve Bank has issued a licence to the bank under Section 22 (1) of the Banking Regulation Act, 1949 to carry on the business of payments bank in India," a press release by Reserve Bank of India (RBI) stated on Tuesday.
Reliance Industries Ltd was one on the applicants which was issued an in-principle approval for setting up a payments bank, said RBI.
Payments bank is a differentiated bank providing a limited range of products, such as acceptance of demand deposits and remittances of funds. It can accept a restricted deposit, which is currently limited to Rs1 lakh per customer. However, these banks cannot issue loans and credit cards.
Last month, RBI issued fresh know your customer norms for payments banks that are likely to increase operational costs for these banks.
According to the new guidelines, payments banks have been directed to get their customers’ information verified by third parties. “Reliance on KYC done by telecom companies is not permissible," an RBI letter sent to chief executive officers of payments banks said.
Other payments banks that have started operations are Airtel Payments Bank Ltd, India Post Payments Bank Ltd, Paytm Payments Bank Ltd and Fino Payments Bank Ltd.
Three applicants have surrendered their licences, while two are yet to set up payments banks - Vodafone m-Pesa Ltd and National Securities Depository Ltd.