Livemint: January 12, 2017
New Delhi: Airtel Payments Bank, a subsidiary of the country’s leading MOBILE PHONE operator Bharti Airtel, is all set to become the country’s first payment bank to be launched on Thursday.
It will be launched in the presence of Union finance minister Arun Jaitley and Bharti Group chairman Sunil Bharti Mittal.
In November 2016, Airtel had rolled out its banking services in Rajasthan and was the first bank to start payment bank services in the country. The pilot roll-out in Rajasthan saw over one lakh customers opening savings accounts in less than two weeks of the commencement of services.
In December, Airtel extended its footprint to south India by rolling out pilot services in Andhra Pradesh and Telangana.
The launch in Delhi is aimed at spreading services in the nearby states of Delhi such as UP and Haryana, eventually leading to a pan-India roll-out.
In 2015, a total of 11 companies had received an in-principle approval from the Reserve Bank of India (RBI) to offer payments bank services out of which three have surrendered their licenses i.e. Chalomandalam Distribution Services, Sun Pharmaceuticals and Tech Mahindra.
On January 3, Paytm received final approval of the RBI to formally launch its payments bank and it expects to start operations by the next month.
Idea Cellular, India Post Payment Bank, FINO PayTech, Vodafone India, Reliance Industries, National Security Depository are all in the race to commence their payment banking soon.
A payment bank is fully digital and paperless banking and customers can access services over their mobile PHONES, including all feature/basic mobile phones. It offers all basic banking facilities like account-opening services and cash deposit & withdrawal facilities. Savings accounts are opened using Aadhaar based e-KYC. This requires no documents at all, only the customer’s Aadhaar number is needed. Although deposits upto Rs1 lakh can only be made.
Airtel Payments Bank offers all these services and just like any traditional bank, it also offers its customers interest on their deposits.
However, Airtel offers 7.25% interest compared to 3-4% offered by conventional banks. Besides the lucrative interest rate, the bank also offers personal accidental insurance of Rs1 lakh with every savings account and free talktime equaling the amount deposited in the payments bank-saving account.
In order to boost cashless transactions, Airtel Payments Bank plans to develop a nationwide merchant ecosystem of over 3 million partners that will include small kirana stores, small shops and restaurants etc. These merchant partners will accept digital payments for goods and services from Airtel Payments Bank customers over MOBILE PHONES. The payment bank will not charge any processing fee from merchants and this facility would be totally free for the customers as well as the merchants.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.