All you need to know about Airtel Payment Bank
It is the first fully digital and paperless bank that will cater to people across the country. All you need is an Aadhaar card to open the account
(L-R) Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel; Sunil Bharti Mittal, Chairman, Bharti Enterprises; Arun Jaitley, Hon’ble Union Minister of Finance and Corporate Affairs; Uday Kotak, Executive Vice Chairman & MD, Kotak Mahindra Bank; and Shashi Arora, MD & CEO, Airtel Payments Bank; together launch Airtel Payments Bank’s national operations
Bharti Airtel launched India's first payments bank, in the presence of Finance Minister Arun Jaitley. The company has earmarked an investment amount of Rs 3,000 crore for the initiative.
Bharti Airtel will hold 80 per cent stake in Airtel Payments Bank, while the remaining 20 per cent will be owned by Kotak Mahindra Bank. Going forward, there are plans to convert as many as 100 million of the total of 270 million customers into Airtel Payments Bank customers, said Bharti chairman Sunil Mittal in a press conference held in Delhi.
Airtel Payments Bank is the first fully digital and paperless bank that will cater to people both in urban and rural areas, across 29 states with a network of 250,000 banking points through Airtel retail stores. All one needs is an Aadhaar number to open an account.
“This are no documents required. Your Airtel telephone number becomes your account number and the Aadhaar enrolment will help us check the biometric,” said Mittal.
“Cost of opening a traditional bank account is way higher than digital bank,” said Uday Kotak, executive chairman and managing director of Kotak Mahindra Bank. “The idea now is to cater to people and facilitate financial inclusion,” he added.
In November last year, Airtel started a pilot payment bank project in Rajasthan across 10,000 retail outlets. After meeting with success, it also decided to expand its operations in South India.
In 2015, the Reserve Bank of India had doled out licences to as many as 11 corporates such as Reliance Industries, Aditya Birla, Vodafone, across the country to offer payments bank services. Startup giant Paytm too has got a license to open a payment bank and it plans to roll out its services by next month.
A payment bank – even as fully digital and paperless – works just like conventional banking where one gets interest on their deposits. Airtel, on its part, will offer 7.25% interest to its payment bank customers. This is much higher than 3-4% interest that is offered by conventional banks. “For now, we have decided to give a 7.5% interest to people. This will also motivate them to open accounts,” said Mittal.
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