The first ever payments bank in India has gone live. Airtel Payments Bank, a pilot project in Rajasthan. It was launched with the promise of being disruptor, offering 7.25% interest on savings bank accounts, known to be the highest return ever offered by any bank in India, with most lenders giving only 4%.
Airtel, which used to offer a wallet – Airtel Money – has now become the first to receive ‘payments bank’ licence from RBI. However, after having the approval, Airtel entered into a pact with Kotak Bank which agreed to acquire a 20% stake in the bank. As per the media sources 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.”
Although, the banks will not be issuing ATM or debit cards, but it will allow the cash withdrawal amenities at designated Airtel retail outlets which will double as banking points. Also, the bank is providing a free personal accident cover insurance of Rs. 1 lakh with every savings bank account.
The idea of differentiated bank licences was initiated by the former RBI governor Raghuram Rajan.
Airtel Payments Bank plans to open accounts by leveraging the telecom operator’s extensive national distribution network over 1.5 million retail outlets in rural areas as well. However, a statement issued by the bank said that towns and villages across Rajasthan can now operate banking facilities at Airtel retail outlets.
A unique feature about ‘payments bank’ is that the people having an Airtel mobile connection will have the mobile number as an account number. The banking would entirely be digitalized and no paperwork, while for opening an account, all you would require is Aadhaar-based eKYC. Besides offering banking services through a mobile app, Airtel Bank’s services can be accessed by dialling *400#; or through an IVR (interactive voice response) system by dialling 400. Both the USSD & IVR options are available in Hindi and English languages and work on feature phones.