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."