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Reliance chairman Mukesh Ambani. (Photo:  Pradeep Gaur/Mint)
Reliance chairman Mukesh Ambani. (Photo: Pradeep Gaur/Mint)

Jio may diversify into mutual funds, other financial products

  • Reliance Jio is said to have been beta-testing the offering among employees for a few quarters now
  • Reliance Jio’s digital payments platform, JioMoney, could be used to sell the mutual funds

Mumbai: Billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd could foray into distributing mutual funds and other financial products in the new year, said three industry officials aware of the development, requesting anonymity.

Reliance Jio’s digital payments platform, JioMoney, could be used to sell the mutual funds. JioMoney allows users to donate, send and receive money, in addition to paying bills and recharging mobile phones and DTH connections, among other services.

“Reliance Jio has been working on rolling out financial services for a few months now. We expect a launch next year," said a senior executive of a financial services firm aware of Jio’s plans.

A Reliance Jio spokesperson did not reply to queries emailed on 26 December. However, a Reliance Jio official, who declined to be named, said the company has been beta-testing its offering among employees for a few quarters now. This would allow it test its network and infrastructure, besides plugging loopholes before a formal launch.

A chief executive at a mutual fund, who declined to be named, said formal discussions have not been held with Reliance Jio so far for distribution. But, it has obtained an account aggregator (AA) licence from the Reserve Bank of India (RBI) through Jio Information Solutions Ltd.

AAs are entitled to collect and share financial information with third parties after getting user’s consent. The information can pertain to sectors governed by the RBI, besides three other regulators, including Pension Fund Regulatory and Development Authority (PFRDA), Insurance Regulatory and Development Authority of India (Irdai) and Securities and Exchange Board of India (Sebi), which regulate mutual funds. The AA system is still at a nascent stage and a full-fledged launch is expected in 2020. Jio’s foray into this space may be part of its larger mutual fund push.

India’s mutual fund industry, with around 20 million unique investors, or just 1.6% of India’s population, is worth 27 trillion. A number of online platforms such as Scripbox, Kuvera and Groww—often funded by venture capitals—have come up in recent years. Large, well-funded groups, such as Paytm and the Times Group, have also entered the fray with apps such as Paytm Money and ET Money. Paytm Money recently tweeted that it had contributed to 20% of the retail participation in the recently concluded Bharat Bond ETF. The ETF received subscriptions of 12,395 crore.

“Reliance Jio has been recruiting for its mutual fund segment. The emphasis is on digital-savvy candidates with sound financial knowledge," said a senior executive of an executive search firm.

Reliance Industries Ltd, which entered the payments bank segment with Jio Payments Bank Ltd in April 2018, is looking to expand its branch network to 70,000 locations. The payments bank is a 70:30 joint venture between RIL and State Bank of India (SBI).

According to its website, Jio Payments Bank will soon roll out services to customers.

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