Pilot project of Jio Financial Services started: Company may launch the service by the end of the year, companies like Bajaj-HDFC will compete.
Reliance has started testing its consumer durable finance program. According to the report, the company may launch Jio Financial Services by the end of this year. The company wants to provide better finance offers to customers purchasing from Reliance Digital so that the margins of Reliance Retail can be increased.
Under the pilot project at many outlets of Reliance Digital, the company is also giving the option of Jio Finance along with other banks to the users purchasing electricals products. After the launch of financial services, there will be competition from other financial service companies including Bajaj Finserv, HDFC Bank.
The demerger of the financial service business was approved two months ago.
The demerger of Reliance Industries and Reliance Strategic Investments (RSIL) has been approved by the creditors and shareholders on May 4 this year. The demerger will be done through a share-swap arrangement. Reliance Strategic Investments will be renamed as Jio Financial Services Limited after the demerger.
Listing of new company can be done by October
The new company may be listed on the stock exchange by October. Shareholders of RIL will get one share of Jio Financial Services for every share they hold. Last year, Reliance Industries announced plans to separate its financial services business into a separate entity and subsequently list it on the stock exchanges.
Plan to start consumer and merchant lending business
Jio Financial Services plans to start consumer and merchant lending business. Global financial services giant Macquarie in its report last year termed Reliance’s financial services business as a major threat to Paytm and other fintech companies in terms of market growth.
Jio Financial Services will stand out from most fintechs because it has access to massive amounts of data. Jio can process and analyze this data in real time to offer financial services like Alibaba, Amazon, Apple.
Jio can become the fifth largest financial services company
After the demerger, Jio Financial Services may become the fifth largest financial services company in the country. Reliance Industries already has an NBFC license, which can be leveraged for consumer or merchant lending.
These companies are involved in the financial services business
Reliance’s financial services business includes Reliance Industrial Investments and Holdings Limited, Reliance Payment Solutions Limited; Jio Payments Bank Limited; Reliance Retail Finance Limited; Geo Information Aggregator Services Limited; and is an investment in Reliance Retail Insurance Broking Limited.
