Airtel has become the first company in the country to launch its payments bank in India. Airtel is one of the 11 entities that had approval from Reserve Bank of India (RBI) to open payments bank in India. M-commerce company Paytm is also going to launch its payments bank later this month. Airtel rolled out a pilot of its payments banking services in Rajasthan in November last year. Starting today, Airtel payments bank is now available in 29 states through 250,000 banking points across the country. Airtel says it has invested about Rs 3000 crore to develop pan India banking network and digital payments ecosystem.
“With Airtel Payments 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. Just like mobile telephony leapfrogged traditional telecom networks to take affordable telecom services deep into the country, Airtel Payments Bank aims to take digital banking services to the unbanked over their mobile phones in a quick and efficient manner. Millions of Indians in rural areas will get their first formal banking experience with Airtel Payments Bank,” said Sunil Bharti Mittal.
What is a payments bank?
The payments banks are basically stripped-down version of current banks, and aim at a ‘financial inclusion’ of those people who don’t have bank accounts. Also, the payments bank aims to reach people through their mobile phones instead of the traditional bank branches. The launch of the payments bank comes amid ongoing push for the digital payments in the wake of demonetization of old Rs 500 and Rs 1,000 currency notes. ALSO READ: Airtel Payments Bank crosses 100,000 savings accounts in less than 2 weeks
The payments banks cannot offer loans or credit cards to customers, but allow deposits up to Rs 1 lakh and give interest on these savings just like the traditional banks do. The banks allow users to transfer money through mobile phones as well as allowing users to automate bill payments. These banks are also allowed to issue debit cards that can be used at ATMs of any bank in the country. The payments bank can also integrate payments to third-parties such as Apple Pay or other wallets. RELATED: Your Paytm wallet won’t stop working on January 15, despite rumours on WhatsApp
How to get started with Airtel’s payments bank?
To begin, customers need to download Airtel Payments Bank app, which is available for both Android and iOS. Users can also use the services through MyAirtel app. Since the payments bank is based an open ecosystem, it will also work with other mobile wallets. Non Airtel customers also open an account with Airtel payments bank. For such customers, My Airtel app will work as the banking app.
Airtel is also offering a quick and paperless account opening using Aadhaar-based eKYC with mobile phone number being the bank account number.
What Airtel is offering with its payments bank?
As per RBI guideline, customers can open savings account up to Rs 1 lakh. For every Rupee deposited at the time of opening a savings account, customers will get one minute of Airtel mobile talktime. Airtel is currently not charging any processing fee from its customers and merchants for digital payments.
Airtel is not offering any physical ATM cards right now but its customers are eligible for a Mastercard online card that will enable them to make payments across all online merchants that accept MasterCard. Customers can deposit and withdraw cash at any of the designated Airtel retail outlets, which will also function as Airtel banking points. ALSO READ: How to get started with UPI apps and go cashless to beat the cash crunch
Users can transfer money from one Airtel number to another Airtel number for free. Airtel is also offering a 7.25 percent per annum interest rate on deposits in savings accounts, though Sunil Mittal says the interest rate could change in the future. The company is also bundling a free personal accidental insurance worth Rs 1 lakh with every savings account.
For feature phone users, Airtel is providing the services through USSD and IVR in 12 Indian languages. Feature phone users can do transactions through USSD by dialing *400# and for IVR dialing the number 400.
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