Reliance Industries Ltd (RIL) and State Bank of India (SBI), India’s largest lender, have signed a shareholders’ agreement for setting up a payments bank.
RIL confirmed in a statement saying: ‘The subscription and shareholders’ agreement was signed by RIL as the promoter with a 70% equity contribution and SBI as joint venture partner with a 30% equity on 30th June 2016.’
In February 2015, RIL and SBI entered into a non-binding memorandum of understanding (MoU) to set out principal terms for the venture.
Last year, in an attempt to expand the reach of banking services and push the goal of financial inclusion promoted by the government of Narendra Modi, the Reserve Bank of India (RBI) gave in-principle approval to RIL and 10 other entities to open payments bank. RIL and SBI then submitted a joint application to establish a payments bank.
‘By combining RIL’s technology, last mile reach and distribution through RIL’s telecom and retail initiatives and SBI’s banking expertise in offering financial services to millions of retail consumers and small enterprises across the country, the payments bank will work toward digitizing payments and promoting digital savings and investments products by creating a cash-less society.’ RIL said.
Talwar Thakore & Associates acted as legal advisors to RIL. The transaction was led by Feroz Dubash. Other members of the team included Sonali Mahapatra, Shruti Zota, Neville Golwalla and Kanwardeep Singh. Vinod Dhall advised on the competition aspects of the transaction.