The first payments bank in the country has gone live. Airtel Payments Bank , which has rolled out a pilot project in Rajasthan, launched with the promise of being a disruptor, offering 7.25% interest on savings bank accounts. This is the highest return offered by a bank in India, with most lenders giving only 4%.
Airtel, which was earlier offering a wallet — Airtel Money — was the first to receive a payments bank licence from the Reserve Bank of India . After receiving the approval, Airtel entered into a pact with Kotak Bank, which agreed to acquire a 20% stake in the bank. Shashi Arora, MD and CEO of Airtel Payments Bank, said, “With this pilot, we have taken a big step towards the launch of our banking services and will be testing our operational readiness for full-scale launch across India.”
The bank’s focus is on financial inclusion and it will not be issuing ATM or debit cards, but will allow cash withdrawal facilities at designated Airtel retail outlets which will double as banking points. The bank is also providing a free personal accident cover of Rs 1 lakh with every savings bank account.
Payments banks are the brainchild of former RBI governor Raghuram Rajan, who came up with the idea of differentiated bank licences.
Airtel Payments Bank plans to open accounts by leveraging the telecom operator’s extensive national distribution network of over 1.5 million retail outlets, including in rural areas. A statement issued by the bank said that those in towns and villages across Rajasthan can now open bank accounts at Airtel retail outlets.
A unique feature about the bank is that customers with an Airtel mobile connection will have the mobile number as an account number. The bank will be fully digital and paperless, with even account opening being done using Aadhaar-based eKYC. Besides offering banking services through a mobile app, Airtel Bank’s services can be accessed by dialling *400#; or through an interactive voice response system by dialling 400. Both the USSD & IVR options are available in Hindi and English languages and work on feature phones.
Source: Times of India
