MUMBAI. State Bank of and Reliance Industries,get into a joint venture to set up payments bank
Reliance Industries and India's largest lender SBI have signed shareholders agreements to set up small deposit-taking institutions, called payments bank.
RIL-SBI combine was among the 11 entities that were in August last year given licence by the Reserve Bank of India (RBI) to start a payments bank.
Payments banks can accept deposits (initially up to Rs 1 lakh per individual), offer Internet banking, facilitate money transfers and sell insurance and mutual funds by piggy-backing on existing retail or other networks. Besides, they can issue ATM/debit cards, but not credit cards.
However, they are not allowed to lend. Instead, they must invest 75% of deposits in short-term government bonds and provide a physical network of access points, one-quarter of which must be in rural areas.
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