Working On Rolling Out Financial Services
Requesting anonymity, three industry officials aware of the development said, Billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd could foray into distributing mutual funds and other financial products in the New Year. It is speculated that JioMoney which is Reliance Jio’s digital payment platform could be used to sell the mutual funds. It will allow users to donate, send and receive money, in addition to paying bills and recharging mobile phones and DTH connections, among other services.
A senior executive of a financial services firm aware of Jio’s plans said, “Reliance Jio has been working on rolling out financial services for a few months now. We expect a launch next year.” An unnamed official from Reliance Jio said the company has been beta-testing its offering among employees for a few quarters now. This would allow it to test its network and infrastructure, besides plugging loopholes before a formal launch.
AA System at Budding Stage
When questions were asked about the update, a chief executive at mutual funds, who didn’t share his name, said as of now there are no formal discussions been held with Reliance Jio for distribution. But, it has obtained an account aggregator (AA) license from the Reserve Bank of India (RBI) through Jio Information Solutions Ltd. The AA system is still at a budding stage and a full-fledged launch is expected in 2020. Jio’s foray into this space may be part of its larger mutual fund push.
The process of mutual funds involves AAs where they are entitled to collect and share financial information with third parties after getting the user’s consent. The information can pertain to sectors governed by the RBI, besides three other regulators, including Pension Fund Regulatory and Development Authority (PFRDA), Insurance Regulatory and Development Authority of India (IRDAI) and Securities and Exchange Board of India (SEBI), which regulate mutual funds.
A Steady Growth in the Mutual Fund Industry
In recent years a number of online platforms such as Kuvera, Scripbox, and Groww have come up which are often funded by venture capitals. With around 20 million unique investors India’s mutual fund industry is worth 27 trillion. Large, well-funded groups, such as Paytm and the Times Group, have also entered the fray with apps such as Paytm Money and ET Money.
Recently, Paytm Money tweeted; it had contributed to 20% of the retail participation in the latest concluded Bharat Bond ETF. The ETF received subscriptions of 12,395 crores. A senior executive of an executive search firm said, “Reliance Jio has been recruiting for its mutual fund segment. The emphasis is on digital-savvy candidates with sound financial knowledge.”
