In order to boost financial inclusion in the competitive conventional banking system, Airtel Payment Bank will offer at a much higher and the lucrative interest rate of 7.25 per cent per annum as compared to 3-4 per cent offered by other conventional banks, be it private or public sector banks in the country, to its savings bank account holders. Besides, the payment bank also offers personal accidental insurance of Rs1 lakh with every savings bank account and free talk-time equaling the amount deposited in the payments bank-saving account.
The Airtel Payments Bank - the first payments bank of the country - was officially launched on Thursday at an event in the capital. Finance Minister Arun Jaitley inaugurated the launch of Airtel Payments Bank owned by Bharti Enterprises, which is being rolled out across the country with an investment of Rs3,000 crore. “As more and more telecom companies enter into the fray, I think we will hopefully, see competition not only amongst telecom companies which we read a lot about these days, but probably see a competition between conventional and new mode of banking,” Jaitley said at the launch.
Airtel Payments Bank offers all these services and just like any traditional bank and it will offer all Airtel customers with an interest rate of 7.25 per cent per annum, which is much higher than any other conventional banks. We also offer personal accidental insurance of Rs1 lakh with every savings account and free talk-time equaling the amount deposited in the payments bank-saving account,” Bharti Enterprises Chairman Sunil Bharti Mittal said, adding that just as mobile telephony leapfrogged traditional telecom networks to take affordable telecom services deep into the country.
Mittal added that Bharti holds 80 per cent stake in the payments bank, while the rest is held by Kotak Mahindra Bank. “We have invested around Rs1,000 crore. We are looking at total investment of Rs3,000 crore over a period of time. We will look at getting some more equity partners but there is no immediate plan as of now,” Mittal added.
Airtel Payments Bank aims to take digital banking services to the unbanked over their mobile phones in a quick and efficient manner. With this payment bank, we are starting another important chapter in our journey, with the potential to truly transform lives and contribute to financial inclusion in the country,” Mittal said.
However, Airtel Payments Bank Managing Director and CEO Shashi Arora said that the bank will look at reaching out to customers across 6 lakh retail outlets in a year. Our payment bank would be fully digital and paperless banking and customers would be able access services over their mobile phones, including all feature or basic mobile phones. Savings accounts are opened using Aadhaar based e-KYC. This requires no documents at all, only the customer’s Aadhaar number is needed,” Arora added.
According to Airtel, now the Airtel Payments Bank is officially live across all 29 states, with over 250,000 Airtel retail stores which will function as digital payment banking centres across the country. Earlier in November, Airtel had launched a pilot payments bank program in Rajasthan, across 10,000 Airtel retail outlets in the state.
“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,” Mittal added.
The new Airtel Payments Bank is different from the Airtel Money wallet, which was already available. “The Airtel Payments Bank is not just a wallet, which means that it allows you to transact more easily with other banks, and also Airtel pays an interest on the money you deposit, which it could not do with the Airtel Money wallet. Users of Airtel Money will be given the option of transferring their balance from the wallet into their Airtel payments bank accounts,” Airtel said.
Airtel Payments Bank also 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,” it added.