SBI, Airtel signs JV pact to offer mobile banking services

SBI, Airtel signs JV pact to offer mobile banking services

State Bank of India and telecom giant Bharti Airtel entered into a joint venture (JV) to make available banking services to the country's unbanked population.

They new entity will start-up with an investment of Rs 100 crore to add value to the banking and financial services sector.

The JV will become the Business Correspondent of State Bank of India (SBI) and offer banking products and services at affordable cost to the citizens, the companies said in a joint statement.

Business correspondents are persons who, besides helping rural people to open bank accounts, would facilitate in banking transactions. Their key role is to accept deposits and remit money.

In the newly formed joint-ventre company, SBI will hold 51 per cent stake and rest will be held by Bharti Airtel, which will be concluded by 31st March, 2011, the statement added.

"This JV will brings together the commitment of two of the India's greatest institutions, which will enable the bank reaching out to every Indian leveraging the distribution network of Airtel to provide banking services," SBI Chairman OP Bhatt said.

The JV as Business Correspondent will engage Airtel's retailers as Customer Service Points (CSP) all over India in a phased manner.

The newly formed entity, will harness the power of State Bank's strengths and airtel's mobile telephony to add value to the banking and financial services sector.

With this JV, existing, new airtel and other mobile customer will be able to visit these outlets and open new SBI bank accounts and avail of other banking products and services available at the CSPs.

Additionally, existing SBI customers will also get serviced at these outlets.

This partnership between India's leading mobile and banking service providers represents a first-of-its kind collaboration, aimed at making the concept of inclusive banking a reality for customers in India.

"This historic collaboration between SBI and Airtel will create a scalable operations that will address the banking requirements of millions of Indians through the mobile platform," Bharti Airtel Chairman, MD Sunil Bharti Mittal said.

As per the Reserve Bank's guideline, banks are allowed to engage retired employees, ex-servicemen and retired government employees and other entities, as prescribed by the central bank, as business correspondents.