Jio Payments Bank seeks RBI approval to open current accounts of RIL

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Jio Payments Bank, the joint venture between Mukesh Ambani’s Reliance Industries Limited (RIL) and State Bank of India have sought the Reserve Bank of India’s (RBI) consent to open current account of Reliance Industries Ltd and different group companies. The permission has been wanted to use the accounts completely for collection and payment services.

There are certain conditions to operate payment banks like they can’t provide money. The payment banks cannot accept cash beyond Rs 1 lakh. The money deposited in an account should not exceed above Rs 1 lakh. Jiopayments bank started their operation in 2018 and jio payments is the sixth payment bank operating in India.

The experts in the industry are in the belief that jio won’t gain from an overnight float that usually comes along with big current accounts. They expressing that it’ll surely help RIL manage funds within the group companies. The scalability of handling RIL current accounts is one of the benefits. The Jio Payments Bank can raise infrastructure, including technology and capability is the other benefit of roping in RIL and other group firms. It allows them to sell similar services to other corporates.

The RBI in a circular it has clearly mentioned that non-lending banks were not allowed to open current accounts. This move was to keep a check on fund diversion by companies indulging in frauds. The interesting thing is to see how the RBI will respond to the Jio Payments Bank’s request. The RBI recently charged penalty worth Rs 1 crore on Jio Payments Bank for not applying for the reappointment of MD and CEO in time.

The RBI is planning to set up full-scale banks like private-sector lenders by allowing large corporate houses. The RBI stated large corporate and industrial houses may be allowed as promoters of banks according to the internal working group report released this month. The well-run large non-banking finance companies (NBFCs), with an asset size of Rs 50,000 crore and above may also be considered for conversion into banks. This includes those which are owned by a corporate house.

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