Payments banks are the next big thing in India’s finance sector. Right after RBI announced the new model, there was a virtual stampede to get a license. Along with different telecom providers Paytm was also one of the first in line to grab the go-ahead for launching its own banking service. However, while the payments aggregator seems to have focused its attention upon handling the boost in cashless following PM Modi’s demonetization scheme, Airtel has beaten it to launch India’s first payments bank service.
Before going any further, here is a quick refresher for you: Payments banks are a new model introduced by the Reserve Bank of India. As per the guidelines that are currently in force, these banks can accept a restricted deposit up to INR 1 lakh per account.While unable to issue loans and credit cards, these banks can operate both current account and savings accounts. RBI hopes to increase the reach of banking services across the country by allowing more private players entry into the arena.
And this is basically what Airtel has means to do with its pilot program in Rajasthan. The new “Airtel Bank” pilot in the state will test the robustness and effectiveness of the company’s systems and processes before it goes ahead with a full-scale, countrywide launch.
In case you are wondering about how Airtel proposes to reach customers this quickly — well, the company already has all the infrastructure it is going to need. Airtel retail outlets are going to double as Airtel Banks. Smart right? This has given the company access to as many as 10,000 branches in Rajasthan alone!
Customers across the breadth of the state will now be able to open bank accounts simply by visiting any of their nearest Airtel retail outlets — Rajasthan has tens of thousands of these! These retail outlets cum Airtel banks will offer consumers convenient access to all the basic banking services. The telecom major is not stopping here either and the company plans to start offering banking services in Rajasthan through as many as 100,000 retail outlets by the year end.
The company than hopes to exploit Bharti Airtel’s 1.5 million+ retail outlets to offer its banking services to the corners of the country.
Speaking on the topic, Shashi Arora, MD & CEO, Airtel Payments Bank, said,
Airtel Payments Bank will play an important role in taking banking services to the last mile in a quick and efficient manner and benefit millions of unbanked citizens of this country. 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.
Here are some of the best features of Airtel’s Payments Banks.
- Banking services will be offered through the company’s retail stores and will include account opening, cash deposit & withdrawal facilities.
- No hassles about remembering your account number because — guess what? — your phone number will be your account number as well.
- Deposits in savings accounts will be eligible for an interest rate of 7.25 % per annum.
- Every savings account gets a free personal accidental insurance of INR 1 Lakh.
- Cash withdrawal and other banking services available through Airtel retail stores.
- Using the payments bank, you can transfer monies to virtually any bank account in India!
- Money transfers from Airtel to Airtel numbers within Airtel Bankare free of cost.
- All you need to get your bank account up and running is your Adhaar card number or e-KYC. No paperwork at all!
Well, it is certainly another huge milestone in the Indian banking industry. Once everyone else who has a payments bank license joins in on the fun, there would be no stopping all of India from having access to basic banking services. Vodafone, Reliance Industries, Idea Cellular, Paytm, FINO Paytech, India Post and National Securities Depository Limited are other major players who have managed to obtain RBI’s go ahead for setting up Payments Banks of their own.
Meanwhile, Paytm still has to kick off its own payments bank, which was supposed to go live by Diwali. We have had no word from the service on the topic as of yet — wallowing in its huge success following PM Modi’s demonetization perhaps? — however, considering that others are already going live with their own Payments banks, Paytm would do well to hurry.
Well, opening a payments bank account and a free accidental insurance is now as easy as getting a new Airtel connection. Another huge step forward towards digital India!