SBI, Airtel form Rs.100 crore mobile banking venture

NEW DELHI - India’s largest public sector bank State Bank of India (SBI) Wednesday entered into a joint venture with telecom giant Bharti Airtel to deliver banking services to those sections which do not have them yet.

“We look forward to taking the benefits of banking to the Indian masses and building a more inclusive society,” SBI chairman O.P. Bhatt said.

SBI will have a 51 percent stake while Airtel will hold 49 percent in the Rs.100 crore joint venture.

The venture will become the business correspondent (i.e. when a bank employs another entity to offer its services) of SBI and provide other banking products and services at affordable cost to people in rural and other areas without SBI branches.

In the last four years, the bank has set up more than 15,000 customer service points (CSP) of business correspondents, as well as 13,000 business facilitators, to increase its outreach.

Airtel mobile customers will now be able to visit these outlets and open new SBI bank accounts and avail of other banking products and services.

The joint venture will engage Airtel’s retailers as customer service points all over India in a phased manner.

“This will be a complete game changer, leveraging SBI’s expertise in the banking sector along with Airtel’s 150 million strong customer base and ecosystem of over 1.5 million retailers and distributors across India,” Bharti Airtel’s chairman and managing director Sunil Bharti Mittal said.

With mobile penetration at over 60 percent, the market possesses great potential for a collaboration that combines the strengths of both banking and telecom sectors, company officials said.

The joint venture incorporation between SBI and Airtel will be concluded by March 31.