MICROCAPITAL BRIEF: State Bank of India Names Reliance Money Infrastructure a Business Correspondent

The State Bank of India (SBI), an Indian state-owned financial services company, reportedly has finalized an agreement with Mumbai-based Reliance Money Infrastructure Limited (RMIL), a service provider to banks, under which RMIL will take on some of SBI’s transactions as a business correspondent[1].

As per the agreement, RMIL will identify borrowers; collect, process and submit loan applications; and monitor credits and credit recovery processes on behalf of SBI. Furthermore, RMIL is authorized to engage with SBI clients to collect small-scale deposits; sell microinsurance, mutual fund and pension products; and receive and deliver small-scale remittances. The threshold for what is considered “small” for these purposes has not been disclosed[1].

An unnamed industry source allegedly suggested that the agreement was aligned with SBI’s long-term strategy to outsource several lines of service in an effort to facilitate growth[1].

The agreement will remain in place for one year and will be automatically extended for an additional year unless terminated by either of the signatories[1].

For the fiscal year 2013, SBI reported total deposits of INR 12.0 trillion (USD 222 billion), net profit of INR 141 billion (USD 2.59 billion), return on assets of 0.91 percent and return on equity of 15.94 percent. Mumbai-based Reliance Money Infrastructure Ltd., a subsidiary of Reliance Capital Limited, is a financial services company that is part of the Anil Ambani Group of India.

By Alíz Crowley, Research Associate

About State Bank of India

The State Bank of India (SBI) is a state-owned bank and financial services company in India. SBI was founded in 1955 by an act of Parliament. It provides investment, consumer, commercial, retail and private banking services, as well as asset management, pension, mortgage and credit card services. For the fiscal year 2013, SBI reported total deposits of INR 12.0 trillion (USD 222 billion), net profit of INR 141 billion (USD 2.59 billion), return on assets of 0.91 percent and return on equity of 15.94 percent.

About Reliance Money Infrastructure Ltd.

Mumbai-based Reliance Money Infrastructure Ltd. (RMIL) is a financial services company that is part of the Anil Ambani Group of India. RMIL provides core banking services and products including savings and investments, loans, money transfer and exchange and gold coin distribution. Formerly known as Reliance Money Limited, as of 2014 the organization operates as a subsidiary of Mumbai-based Reliance Capital Limited. Financial information on RMIL is unavailable.

Sources and Additional Resources:

[1] The Hindu Business Line, “SBI signs up Reliance Money Infra as business correspondent,”  http://www.thehindubusinessline.com/companies/sbi-signs-up-reliance-money-infra-as-business-correspondent/article5960356.ece?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

MicroCapital.org article, January 3, 2014, “Reserve Bank of India Approves State-Run Savings Scheme for Poor People in West Bengal After Collapse of Saradha Group,” https://www.microcapital.org/microcapital-brief-reserve-bank-of-india-approves-state-run-savings-scheme-for-poor-people-in-west-bengal-after-collapse-of-saradha-group/

MicroCapital.org article, June 30, 2012, “Reliance Capital to Serve as Banking Correspondent for State Bank of India,” https://www.microcapital.org/microcapital-brief-reliance-capital-to-serve-as-banking-correspondent-for-state-bank-of-india/

MicroCapital.org article, January 21, 2012, “State Bank of India to Grow Microfinance Portfolio by 50%, Microfinance Institutions Network Promotes Wholesale Lending to Sector” <-COMMA NEEDED INSIDE QUOTATION MARK https://www.microcapital.org/microcapital-brief-state-bank-of-india-to-grow-microfinance-portfolio-by-50-microfinance-institutions-network-promotes-wholesale-lending-to-sector/

MicroCapital Universe Profile: State Bank of India https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=State+Bank+of+India

MicroCapital Universe Profile: Reliance Money Infra https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=About+Reliance+Money+Infrastructure+Limited

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