Jio Financial Services to Acquire Entire Stake of SBI in their JV Jio Payment Bank

Jio Financial Services Ltd (Jio Fin) is set to acquire the entire stake of State Bank of India (SBI) in their joint venture, Jio Payments Bank. This acquisition involves purchasing 7.9 crore shares from SBI for ₹104.5 crore.

As a result, Jio Fin's shareholding in Jio Payments Bank will increase from 82.17% to 100%, making it a wholly-owned subsidiary.

The deal is subject to approval from the Reserve Bank of India (RBI) and is expected to be completed within 45 days of receiving the necessary clearance. This move aligns with Jio Financial's strategy to expand its operations and strengthen its position in the financial services sector.

Initially founded as a joint venture between Jio Financial Services and SBI, Jio Payments Bank started its operations in April 2018 and has garnered 1.89 million CASA customers as of December 2024. Spun off from Reliance Industries in 2023, Jio Financial Services has been ramping up its operations and expanding its footprint in the financial services sector.

With this acquisition, Jio Financial Services aims to strengthen its position in the financial services market and enhance its digital financial solutions.

Following the announcement, shares of Jio Financial Services saw a surge of nearly 4%, reaching an intraday high of ₹208 on the BSE.

Jio Financial Services reported a consolidated profit of ₹295 crore for the third quarter ending in December 2024, marking a slight 0.3% increase year-on-year.
The company's assets under management (AUM) grew to ₹4,199 crore, up from ₹1,206 crore in the previous September quarter of FY25.

Notably, Jio Financial Services has been planning to set up a mutual fund business in collaboration with U.S.-based BlackRock. The company also introduced a pilot version of the 'JioFinance' app in May 2024, offering UPI, digital banking, and other related services.

This acquisition is a strategic move for Jio Financial Services to consolidate its position in the financial services sector and leverage its digital capabilities to offer a comprehensive range of financial products and services.

Paytm Payments Bank's MD, CEO Surinder Chawla Resigns

Surinder Chawla, the Managing Director and CEO of Paytm Payments Bank, has resigned from his position. The resignation was tendered on April 8, 2024, citing personal reasons and a desire to explore better career prospects.

Chawla will be relieved from his duties effective close of business hours on June 26, 2024, unless there is a mutual agreement to change this date. This follows recent regulatory actions by the Reserve Bank of India and changes within the bank's board.

Surinder Chawla joined Paytm Payments Bank as the Managing Director and CEO in January 2023. Given his resignation in April 2024, he served in his role for approximately 1 year and 4 months.

It was under Chawla's leadership that Paytm Payments Bank received approval from the Reserve Bank of India, which is a significant endorsement for any banking institution. He focused on expanding the CASA base, fee revenue, and cross-selling across channels, which are key areas for a payments bank's growth and stability.

A merit-listed Chartered Accountant, Surinder Chawla joined PPBL from RBL Bank, where he served as Head – Branch Banking and focused on expanding the CASA base, fee revenue, and cross-selling across channels. Prior to joining RBL Bank in 2013, Chawla spent about 12 years in key senior management positions at HDFC Bank, culminating in his role as Head of the Retail Liabilities Product Group. As Senior Executive Vice President at HDFC Bank, Chawla also worked as the head for the Southern, Eastern and Northern regions at different points in his career.

Fino Payments Bank Limited’s Proposed Initial Public Offering

Mr. Rishi Gupta, Managing Director and Chief Executive Officer, Fino Payments Bank

• Price Band of ₹ 560 – ₹ 577 per equity share bearing face value of ₹ 10 each (“Equity Shares”).
• Bid/Offer Opening Date – Friday, October, 29 2021 and Bid/Offer Closing Date – Tuesday, November 02, 2021.
• Minimum Bid Lot is 25 Equity Shares and in multiples of 25 Equity Shares thereafter.
• The Floor Price is 56 times the face value of the Equity Shares and the Cap Price is 57.7 times the face value of the Equity Shares.

Fino Payments Bank Limited (the “Company”) is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to open its initial public offering of Equity Shares (the “Offer”) on Friday, October 29, 2021 and close on Tuesday, November 02, 2021. The price band for the Offer has been determined at ₹ 560 – ₹ 577 per Equity Share.

The Offer comprises of a fresh issuance of Equity Shares aggregating up to ₹ 3,000 million (“Fresh Issue”) and an offer for sale of up to 15,602,999 Equity Shares by Fino Paytech (the “Promoter Selling Shareholders”).

The Company intends to utilize the net proceeds from the fresh issue towards augmenting the bank's tier-1 capital base to meet its future capital requirements.

Fino payments bank is a wholly owned subsidiary of Fino Paytech Limited (FPL), primarily engaged in providing technology-based solutions and services related to financial inclusion. FPL is backed by marquee investors like Blackstone, ICICI Group, Intel Capital Corporation, Bharat Petroleum, HAV3 Holdings (Mauritius) Limited and World Bank Arm International Finance Corporation (IFC), amongst others.

Axis Capital Limited, CLSA India Private Limited, ICICI Securities Limited, and Nomura Financial Advisory and Securities (India) Private Limited are the book running lead manager to the Offer (“BRLM”).

The Company and the Selling Shareholder have, in consultation with the book running lead manager to the Offer, considered participation by Anchor Investors in accordance with the SEBI ICDR Regulations, whose participation shall be one Working Day prior to the Bid/Offer Opening Date, i.e. Thursday, October 28, 2021. The Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended, read with Regulation 31 of the SEBI ICDR Regulations. The Offer is being made through the Book Building Process, in compliance with Regulation 6(2) of the SEBI ICDR Regulations, wherein not less than 75% of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.

Disclaimers: 

FINO PAYMENTS BANK LIMITED is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public issue of its equity shares bearing face value of ₹ 10 each (“Equity Shares”) and has filed the RHP with the RoC and thereafter with SEBI and the Stock Exchanges. The RHP shall be available on the website of the SEBI at www.sebi.gov.in as well as on the websites of the BRLMs, i.e. Axis Capital Limited at www.axiscapital.co.in, CLSA India Private Limited at www.india.clsa.com, ICICI Securities Limited at www.icicisecurities.com and Nomura Financial Advisory and Securities (India) Private Limited at www.nomuraholdings.com/company/group/asia/india/index.html. Investors should note that investment in equity shares involves a high degree of risk. Potential investors should not rely on the Draft Red Herring Prospectus filed dated 30th July, 2021 with SEBI for making any investment decision. The Equity Shares offered in the Offer have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“U.S. Securities Act”), or any state law of the United States and, unless so registered, may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered and sold (i) within the United States only to persons reasonably believed to be “qualified institutional buyers” (as defined in Rule 144A under the U.S. Securities Act) under Section 4(a) of the U.S. Securities Act, and (ii) outside the United States in “offshore transactions” in compliance with Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales are made. There will be no public offering of Equity Shares in the United States.

DISCLAIMER CLAUSE OF SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI”): (“SEBI”): SEBI only gives its observations on the offer documents and this does not constitute approval of either the Offer or the specified securities stated in the Offer Document.

DISCLAIMER CLAUSE OF BSE (Designated Stock Exchange): Exchange): It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the RHP has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the RHP..

DISCLAIMER CLAUSE OF NSE: NSE: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Offer Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Offer Document.

DISCLAIMER CLAUSE OF RBI: Our Bank has obtained a license authorizing us to carry on payments bank business from the Reserve Bank of India in terms of section 22 of the Banking Regulation Act, 1949. It must be distinctly understood, however, that in issuing the license, the Reserve Bank of India does not undertake any responsibility for the financial soundness of the Bank of for the correctness of any of the statements made or opinion expressed in this connection.

For further details in relation to the Company and Compliance Officer of the Company, please refer to statutory advertisement dated October 25, 2021

Fino Payments Bank posts Q4 profit, ends FY20 with positive EBITDA

YoY revenue grows 86%, merchant network, transaction volume and value doubles

Mumbai, 20May, 2020: Fino Payments Bank Limited (FPBL) today announced that it turned profitable at the operating level for the financial year 2019-20. This feat is achieved within three years of the bank starting operations in July 2017.

This makes FPB the only standalone profitable payments bank that works solely on RBI’s financial inclusion objective by improving banking access predominantly in rural India.

Transactions have been the driving force behind Fino Payments Bank’s operating profit journey. In FY 19-20, FPB facilitated overRs1 lakh crore worth of transactions, doubling on the previous fiscal’s throughput. In terms of volume, transactions have almost doubled from 195 million in FY 18-19 to over 380 million in FY19-20.

Rishi Gupta, MD & CEO, Fino Payments Banksaid “Not having an asset product makes payments bank model risk free. We worked towards turning this perceivedliability and a payments only modelinto an asset. Our strategic focus on having a lean variable cost model riding on digital platforms, increasing transactions and high margin productsenabled us to grow by over 86% in FY19-20. With revenue of Rs 689 crores, we closed FY 19-20 with positive EBITDA and posted profit in Q4.”

“It is a path breaking achievement for us as we demonstrated the robustness of the bank’s business model amidst challenges and showcased the success ofservicing low income mass market customers. We believe this will be a watershed moment for Fino and the first of many profitable quarters to come. We aim to take the momentum forward and continue growing at a good pace to create value to all our stakeholders,” added Mr. Gupta.

Business drivers

For FPB domestic remittance (urban to rural) transactions accounted for over 40% of the FY19-20 throughput, making the bank a top five player in the IMPS business.

Further, FPB transformed the rural banking landscape by facilitating micro ATM and AePS led digital transactions (withdrawals), which contributed to over 30% to the business. The interoperable digital platforms allowed customers of all bankstransact at Fino points leading to a 4 times surge in withdrawals over the last fiscal.

As a result FPB figured consistently amongst the top 3 banks in MEITY’s (Ministry of Electronics & IT) digital payments monthly rankings for allbanks.

FPB expects increased adoption of digital platforms by its customers, 50% of whom are tech savvy millennials. As more people experienced the convenience of banking from Fino platform, the bank’s CASA customer baseincreased by over 65% inFY19-20.

Network

FPB’s strategy is to have a strong financial services distribution network. The bank doubled its network from less than a lakh in FY18-19 to close to 2 lakh points by the end of FY19-20, with around 80% presence in rural areas.

The bank also works with more than 50 API partners that have a collective network of 2 lakh points. This makes FPB’s combined (own plus partner) network around 4 lakh points. To further improve banking access, FPB plans to increase the network to 10 lakh outlets over the next 24-30 months.

COVID 19

FPB’s transactions-led business model helped it withstand the current business environment with minimal impact. In May the bank’s business is set to reach about 80% of the pre-lockdown value, aided by rise in DBT transactions andthe customer convenience of using FPB’s network. The bank expects to reach pre-COVID 19 business levels in the next couple of months.

Continuing its recovery path by aggressively on boarding merchants, facilitating transactions and reducing operating cost, FPB aims to hit profitability track in H1 20-21.

Snapshot: Among the top 5 banks in IMPS transactions Largest deployer of micro ATMs in the country with over 1.1 lakh devices Only payments bank to have a subscription based savings account Processes over Rs 1 lakh crore worth of transactions annually. Largest financial services distribution network in the country with a combined network (own plus partners) of over 4 lakh points. As of March 2020, savings deposits of Rs 222 crores. Among top 3 performing banks in facilitating digital transactions – MEITY ratings

India Post Payments Bank Crosses Milestone of 2 Crore Customers

 

• Milestone achieved in 17 months since launch of operations


• With Aadhaar Enabled Payment System (AePS), IPPB single largest platform in providing interoperable banking services 

The Union Minister for Communications, Electronics & IT and Law & Justice Shri Ravi Shankar Prasad today announced that India Post Payments Bank (IPPB) has achieved an important milestone of 2 crore customers, providing a major impetus to Government’s efforts in furthering financial inclusion in unbanked and underbanked areas across the country.

In August last year, IPPB had reached the landmark of 1 crore customers in just its first year of operations. The next 1 crore customers have been acquired and onboarded in just 5 months. On an average, IPPB has been opening/maintaining a run rate of 33 lakh accounts per quarter.

Speaking on the milestone of 2 crore customers, Shri Ravi Shankar Prasad, Union Minister for Communications, Electronics & IT and Law & Justice said, “The success of IPPB’s business model underlines the Government’s intent in creating an interoperable banking infrastructure for the public good contributing toward changing the financial inclusion landscape in India. Since its launch, IPPB has enabled more than 1.36 Lakh Post Offices and 1.9 Lakh Dakiyas to provide a complete suite of banking services at the doorstep of the customer providing access to any Aadhaar linked bank account, leading to an increase in rural banking infrastructure by almost 2.5 times.” 

“IPPB has been a harbinger in realizing Hon’ble Prime Minister Narendra Modi’s vision of ushering economic transformation by bringing banks to the doorsteps of the villagers and the poor. While Jan Dhan Yojana was the first step in bringing crores of Indians into the financial mainstream, IPPB’s ability to provide Interoperable Doorstep banking services to customers of any bank including the over 38 crore Jan Dhan account holders captures the essence of IPPB’s motto of Aapka Bank, Aapke Dwaar. I wish DoP and IPPB all the success in their journey of creating newer milestones,” he further said.   

With the launch of Aadhaar Enabled Payment System (AePS) Services in September 2019, IPPB has now become the single largest platform in the country for providing interoperable banking services to the customers of any bank. With AePS services any common person with a bank account linked to Aadhaar can perform basic banking services such as cash withdrawals and balance enquiry irrespective of the bank they hold their account with. To avail these services, a customer with an Aadhaar linked account can simply authenticate his/her identity with fingerprint scan & Aadhaar authentication to complete a transaction. AePS services are bank-agnostic and are driven by an inexpensive infrastructure enabling low cost delivery of doorstep banking services to every section of the society without discrimination.

IPPB has implemented one of the largest ever digital financial literacy program by investing over 1 crore man hours in training and certifying more than 250,000 Postal Assistants, Postmen and GDS as Banking Service providers. The Bank has also digitized all the post office counters through a simple QR Code to accept electronic payments and also enabled direct payments into various post office saving schemes and purchase of postal products.

About India Post Payments Bank

India Post Payments Bank (IPPB) has been established under the Department of Posts, Ministry of Communication with 100% equity owned by Government of India. IPPB was launched by the Hon’ble Prime Minister Shri Narendra Modi on September 1, 2018. The bank has been set up with the vision to build the most accessible, affordable and trusted bank for the common man in India. The fundamental mandate of India Post Payments Bank is to remove barriers for the unbanked & underbanked and reach the last mile leveraging the Postal network comprising 155,000 Post Offices (135,000 in rural areas) and 300,000 Postal employees.

IPPB’s reach and its operating model is built on the key pillars of India Stack - enabling Paperless, Cashless and Presence-less banking in a simple and secure manner at the customers' doorstep, through a CBS-integrated smartphone and biometric device. Leveraging frugal innovation and with a high focus on ease of banking for the masses, IPPB delivers simple and affordable banking solutions through intuitive interfaces available in 13 languages.

IPPB is committed to provide a fillip to a less cash economy and contribute to the vision of Digital India. India will prosper when every citizen will have equal opportunity to become financially secure and empowered. Our motto stands true - Every customer is important, every transaction is significant and every deposit is valuable. 

For further details, visit www.ippbonline.com 

Vodafone-Idea's Money App M-Pesa Shutting Down, Writes-off ₹210 Cr for Payment Bank Closure

Vodafone Idea Ltd has decided to close m-pesa vertical following the closure of Aditya Birla Idea Payments Bank Ltd (ABIPBL), in which it was being merged with, a top official said on Monday. Launhed in 2007, M-Pesa is a mobile phone-based money transfer, financing and microfinancing service launched by Vodafone for Safaricom and Vodacom.

Last week, ABIPBL had announced that it is winding up of its business on account of "unanticipated developments" that made its economic model "unviable".

"The merger of Vodafone m-pesa with ABIPBL has thus been called off and business prepaid instruments and business correspondence are in the process of closure," Vodafone Idea Chief Executive Officer Balesh Sharma said company's earning call. He attributed regulatory changes for the payments bank business and deterioration in health of telecom sector to the decision.

"Now, that we are proposing not to have the payments bank as well as the m-pesa business. Instead of having m-pesa of our own, we will explore the market and partner with fintech companies," Sharma said.

Vodafone Idea wrote off Rs 210 crore in the June quarter on account of decision to close its payments bank business.

"The impairment charges include impairment in payments bank and m-pesa entities of Rs 2.1 billion (Rs 210 crore) following the decision to discontinue payments bank, wallet and business correspondent businesses in the respective entities," Vodafone Idea Chief Financial Officer Akshaya Moondra said.

The company had written off a total amount of Rs 580 crore during the first quarter of 2019-20. Vodafone m-pesa was one of the 11 firms that was given payments bank licence by the Reserve Bank of India in 2015.

Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank Ltd and Telenor Financial Services surrendered their payments banks licences even before commencing their business.

Sharma said that decision to close down payments bank business is also part of the company's strategy to focus on core business which is the telecom business. Vodafone Idea is phasing out 3G services and re-farming all spectrum for 4G services.

The company is looking to check the churn of customers onto other network which led it to lose market leadership position to Reliance Jio in June.

Reliance Jio had a user base of 331.3 million by June 2019 while that of Vodafone Idea subscriber base declined to 320 million in the same month. Sharma said after a minimum charge of Rs 35 per month introduced by the company, many customer consolidated to single SIM which showed 4G subscribers moving out of the Vodafone Idea network.

He said the churn has come down to 3.7 per cent and the company is making effort to curb it further with high revenue generating customers.

Few days back, a report from economists at SBI said that, "The future is "uncertain" for payments banks and the model aimed at deepening financial inclusion requires regulatory support in order to be effective."

Payments Banks need Govt and Regulatory Support for Growth -SBI

The future is "uncertain" for payments banks and the model aimed at deepening financial inclusion requires regulatory support in order to be effective, a report said Monday.

The report from economists at SBI comes days after Aditya Birla Payments Bank, of the handpicked licensees, reportedly decided to shut down from October 2019. Vodafone m-Pesa had also shut shop earlier this month.

"The future is uncertain, but in time business will expand and evolve, with the help of regulatory and Government support," they said in the note.

The payments bank model "seems to have failed to achieve the stated objectives" with only four entities
becoming operational out of the 11 players licensed in 2014, it said.

The report said the payments banks face stringent regulations both on the asset and the liabilities side.

They are not allowed to lend, deposit acceptance is capped at Rs 1 lakh and the capital requirement is at a steep 15 per cent despite the business being free from credit risks.

The higher disclosure norms that oblige them to share their business plan with the regulator could prove to be "somewhat tricky" when the business model of the technology-intensive companies itself could be the biggest source of their competitive strength, it said.

As a result, the entities are working merely as an aggregator and there is no possibility for them to be a "real competitor" for the universal banks, it said.

The model, however, can be successful if they are given access to Aadhaar-based know your customer process which is at least thrice as cheaper than manual KYC and if RBI allows PBs to tie up with third-party services to cross-sell products, it said.

Arrangements with universal banks to automatically transfer funds in accounts exceeding Rs 1 lakh can also be of help, it said. PTI AA

Aditya Birla Idea Payments Bank to Close Operations

Nearly 17 months after it began operations, Aditya Birla Idea Payments Bank Limited (ABIPBL) Saturday announced winding up of its business on account of "unanticipated developments" that made its economic model "unviable".

"...we wish to inform you that the Board of Directors of our associate company Aditya Birla Idea Payments Bank Limited (ABIPBL), has subject to receipt of requisite regulatory consents and approvals, approved the voluntary winding up of ABIPBL," Vodafone Idea Limited said in a regulatory filing.

The decision has been taken due to unanticipated developments in the business landscape that have made the economic model unviable, the filing added.

In February 2018, Aditya Birla Idea Payments Bank became the fourth such entity to begin operations since the issuance of licences to 11 firms by RBI in August 2015.

The company is the fourth payments bank to shut shop after Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank Ltd and Telenor Financial Services that pulled the plug of operations.

Vodafone Idea Limited in a regulatory filing said, "the Board of Directors of our associate company Aditya Birla Idea Payments Bank Limited (ABIPBL), has subject to receipt of requisite regulatory consents and approvals, approved the voluntary winding up of ABIPBL".

ABIPBL had received the banking licence from the RBI on April 3, 2017, for carrying on the business of a payments bank and had also received an authorisation to carry on the business of Prepaid Payments Instrument business. It commenced business from February 22, 2018.

Sources privy to the development said that the payments bank has about 200 employees and a majority of them are likely to be absorbed in other group entities, while the rest will be offered outplacement assistance.

Total deposits with Aditya Birla Idea Payments Bank stand at about Rs 20 crore, according to sources.

"The payments bank does not want customers to worry about what happens to their money. They will be given enough time and notice to transfer or withdraw it," the source said adding that the closure of operations could take about three months.

Aditya Birla Payments Bank is promoted by Grasim Industries Limited and Vodafone Idea Limited with 51 and 49 per cent shareholdings respectively.

According to the filing, ABIPBL incurred a loss of Rs 24 crore at the end of 2017-18.

Aditya Birla group said ABIPBL has made full and complete arrangement of funds for the return of customer deposits and meeting its all liabilities and is taking steps to ensure smooth closure of all the customer accounts and settlement of their balances.

"The Bank will continue to be operational for limited banking transactions and will provide a facility to the customers for withdrawing/transferring their balances," the group said in a statement.