Airtel launches India's first payments Bank

Demonetization has been the germinating bed for a lot of new concepts lately. From various startups coming up overnight to help you deal with the cash crunch confusion to RBI’s new model of payments banks, ideas and companies are locked in a battle to beat each other.

Making a move in the direction, yesterday, Airtel beat everyone else to launch India’s first payments bank service. Payments banks, a new model introduced by the Reserve Bank of India, 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.

For now, it’s only a pilot in Rajasthan aimed at testing systems and processes ahead of a full-scale pan-India launch. "With this, Airtel Bank becomes the first payments bank in the country to go live. Airtel Bank will commence the pilot with banking points at 10,000 Airtel retail outlets (in Rajasthan)," Airtel said in a statement.

The company said customers in towns and villages across Rajasthan will now be able to open bank accounts at Airtel retail outlets, which will also act as Airtel banking points and offer a range of basic banking services.

The payment banks will cater to the needs of small savings accounts, remittance services, low-income households, small businesses and other unorganized sector entities.

"This initiative, perfectly in sync with Prime Minister's vision for financial inclusion and Digital India, will be a boon to residents in far-flung areas who are yet to have access to formal banking. I look forward to Airtel reaching every corner of Rajasthan," said Rajasthan Chief Minister Vasundhara Raje.

The key features of the new model include- deposits in savings accounts eligible for an interest rate of 7.25 percent 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 and transfer of money to virtually any bank account in India.

Most importantly, your mobile number will be your account-number so no worries about remembering another ten digit configuration.

In words of Shashi Arora, MD & CEO, Airtel Payments Bank, "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."