Reliance Industries Limited has teamed up with State Bank of India to apply for a payments bank license. This MoU will bring together the India’s biggest banking network and major telecom and retail system.

RIL and SBI put in a joint application to the Reserve Bank of India (RBI) to set up a payment bank that can offer services such as remittances and deposits but not loans.

SBI, which is country’s largest money lender being a commercial bank could not apply for a payment bank license. SBI will hold 30% in the joint venture. RIL will be the promoter and hold the balance 70%, the company said in a statement.

"The partnership is in accordance with the guidelines for Payments Bank issued by RBI... This partnership brings together the combined strengths of two of India's Fortune500 corporations committed to making a transformative impact on India's financial inclusion landscape," the statement said.

The payments bank will leverage SBI's nationwide distribution network and risk management capabilities along with the substantial investments made by RIL in its retail and telecom businesses.

RIL did not disclose the investment or the board composition of the joint venture.

RIL has nationwide 4G telecom license and plans to provide telephony and broadband services in all states, 5,000 towns and cities accounting for over 90 per cent of urban India and over 215,000 villages in India. Also, through 2,300 retail stores across 166 cities its retail venture touches more than 10 lakhs customers a day.

SBI, which has 15,869 branches and 43,515 ATMs, has tied up with over 45,487 business correspondents.