SBI's Jio bank JV stake dips to 23%

State Bank of India's (SBI) shareholding in Jio Payments Bank fell to 23% in FY23 from the 30% that it has maintained since inception, indicating its disinterest in the payments bank business model. The fall below 25% also means SBI will no longer be able to block special resolutions at its seven-year-old joint venture (JV).

- Shayan Ghosh

India's largest bank stayed away from two Jio Payments Bank rights issues, while its JV partner Reliance Industries (RIL) picked up 10 million shares on 29 November, and 70 million on 23 January, according to a directors' note in the payment bank's regulatory filing seen by Mint. In FY22, SBI had put in ₹9.48 crore into the JV.

"In terms of Section 114 of the Companies Act, 2013, a special resolution can be passed when at least 75% members of the company vote in favour of the resolution, which means that it can be blocked when members holding more than 25% plus one vote against the resolution," said Rajiv Sharma, partner at law firm Singhania & Co.

Introduced during the tenure of former Reserve Bank of India (RBI) governor Raghuram Rajan, payments banks were expected to reach out to the under-banked and unbanked masses, accepting deposits of up to ₹2 lakh per customer. They, however, cannot lend.