14 December 2017
visit www.solutions.lexisnexis.com

Airtel pilots India's first Payments Bank

24 November 2016  |  7249 views  |  4 Indian flag 2

Telecoms giant Bharti Airtel has launched the first of India's new wave of 'payments banks', going live with a pilot across the state of Rajasthan.

In a bid to take advantage of the mobile revolution to increase financial inclusion, last year India's government granted Airtel, along with others such as Paytm and the Department of Posts, so-called 'payments bank' licences.

These new players, taking on traditional lenders, are able to take deposits of up to Rs 1 lakh, issue debit and ATM cards, and facilitate online transactions - but are not allowed to lend money.

Airtel Payments Bank has now become the first of the new breed to open up to the public through a pilot in Rajasthan to test its systems ahead of a country-wide launch.

Taking advantage of its vast retail network in the state, Airtel is inviting customers in towns and villages to open bank accounts using just their government Aadhaar ID number in one of its 10,000 stores, which will also act as banking points. Airtel mobile numbers will act as account numbers.

A network of merchants across Rajasthan will accept digital payments from Airtel Bank from day one, with 100,000 onboard by the end of the year. Customers will also be able to make money transfers to any bank account in India and reap a 7.25% interest rate on deposits held in savings accounts.

Shashi Arora, MD & CEO, Airtel Payments Bank, says: "Airtel Payments Bank is fully committed to the Government’s vision of financial inclusion and banking for all. 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."

Comments: (4)

Vijay D
Vijay D - TCS - Chennai | 25 November, 2016, 01:28

While we congratulate Airtel on the launch, I guess they are unlikely the first payment bank to live. Equitas lauched payments bank on 3 Sep ...          please refer to http://www.thehindubusinessline.com/money-and-banking/equitas-small-finance-bank-starts-operations/article9075512.ece

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Subhabrata Sanyal
Subhabrata Sanyal - Capgemini - Pune | 25 November, 2016, 11:27

I am interested to know, other than corss selling of their telecom product to their payment bank customers, how else they will earn profit

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Vishnu Datta
Vishnu Datta - Edgeverve - Bangalore | 26 November, 2016, 06:40

@Vijay, Equitas is small finance bank, not a payments bank.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Hitesh Thakkar
Hitesh Thakkar - FIS Payments Software and Services India - India | 27 November, 2016, 14:56

Financial Inclusion - covering more citizens under banking system has several agenda. One of the teething issue was Telecom operators with pre-paid wallets. Coming up with Payments bank license protects for running parallel creation of 'Money'.

Indian govt has come up with brilliant strategy JAM Trinity - Prime Minister Jan Dhan Yojana (PMJDY), Aadhaar and Mobile connectivity (JAM) to kill several birds with single stone such as DBT (Direct Benefit Transfer) of Govt benefits, low cost of vehicle of mobile wallet/banking ( NPCI with UPI) and world's largest biometric database UIADI/AADHAR database.

Payments banks can see synergy to work with traditional banks for opening more banks accounts and service using low cost channels ( read Mobile and BC banking). Payments banks can find several ways to build business services/value added services as all these accounts are under KYC (or e-KYC) and ready for more digital services through universal banks on collobrative mode.

SBI and Reliance JIO has already started several steps towards it and more payments banks will come up with some brilliant.

Ofcourse, these leads to demand of issuing more universal banking licenses as well as merger of existing banks to consolidate and bring efficient economic enviornment in the country.

1 thumb up! 1 thumb up! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

India's Paytm enlists Wipro for payments bank tech platform

India's Paytm enlists Wipro for payments bank tech platform

02 May 2016  |  7285 views  |  1 comments | 4 tweets | 6 linkedin
Uber introduces Airtel Money payment option in India

Uber introduces Airtel Money payment option in India

21 August 2015  |  10060 views  |  0 comments | 13 tweets | 6 linkedin
Telcos and tech firms get Indian payment bank licences

Telcos and tech firms get Indian payment bank licences

19 August 2015  |  14058 views  |  6 comments | 34 tweets | 19 linkedin
Bharti Airtel seeks Indian payments bank license

Bharti Airtel seeks Indian payments bank license

29 January 2015  |  7000 views  |  2 comments | 9 tweets | 4 linkedin

Related blogs

Create a blog about this story (membership required)
visit www.aciworldwide.comvisit www.response.ncr.comvisit www.solutions.lexisnexis.com

Top topics

Most viewed Most shared
Saxo Bank's 'Outrageous Prediction': Bitcoin to peak at $60k next year before spectacular crashSaxo Bank's 'Outrageous Prediction': Bitco...
12305 views comments | 7 tweets | 7 linkedin
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
9656 views comments | 16 tweets | 22 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
8310 views comments | 17 tweets | 36 linkedin
Santander UK poaches Barclays innovation chief Michael HarteSantander UK poaches Barclays innovation c...
7437 views comments | 8 tweets | 17 linkedin
Alior Bank to use Open API platform and accelerator to create fintech marketplaceAlior Bank to use Open API platform and ac...
7360 views comments | 20 tweets | 11 linkedin

Featured job

Competitive base, commission, benefits
London, UK

Find your next job