Airtel Payments Bank Announces Additional Benefit on Savings Deposits

Airtel has been relentlessly expanding its telephone and data services across the country. But that is the core competency of Airtel. Recently, Airtel has also branched out into the non-banking payments space. We had already been seeing the proliferation of e-wallets in India, and Airtel had already created a presence in that space with its Airtel Money offering. This was being widely used by clients to make a variety of payments, mostly of Airtel postpaid bills. The next logical step by Airtel was to open a payments bank, which it finally did in 2016.

Let us first what a payments bank is, and how it differs from a conventional bank. In line with the Government’s push to bring more and more people in the country into the banking mainstream, the RBI has mandated the opening of payments bank across the country. These banks would be designated as non banking financial institutions. Their functioning would be quite similar to the e-wallets. But they would actually be allowed to open current and savings accounts for clients and pay interest on them as per RBI mandates, whereas payment wallets would just function as temporary repositories for keeping cash. The mandate for payments bank does not include (so far) the opening of fixed deposits and giving loans.

Airtel payments bank was launched in line with these very guidelines of RBI. The large unbanked part of the population might not have access to banking branches, but they were sure to have a mobile phone and a mobile number. The Airtel payments bank would use the same Airtel phone number as the account number of the payments bank account. This would sharply increase the reach of banking services in the interiors. The savings account in the Airtel payments bank would also provide normal interest to the account holder. At present, Airtel is providing the same rate of interest as banks, at 4%.

Airtel would not have branches or even ATMs. They would instead set up Banking Points from where people could withdraw money from their accounts if they needed cash themselves instead of making payments through the wallet. Airtel hasn’t planned on additional infrastructure for these Banking Points. Their existing stores or certain existing stationery or grocery stores in each neighbourhood would function as the Banking Point for that area.

Instead of withdrawing cash, if cash needs to be remitted to someone, the Airtel payments Bank would facilitate that as well. That would require the account holder to have an Airtel Money e-wallet, from which the remittance would be facilitated. Let us also see how the Airtel payments bank account can be opened.

The account opening process takes advantage of the fact that the Aadhaar card of every person is issued only after collection of biometric data including fingerprints. Most phone numbers have their Aadhaar numbers linked and authenticated already, so a simple scan of the fingers on your smartphone would enable the My Airtel or Airtel payments bank app to validate your finger scans with your Aadhaar number.

For more info: airtel payment bank interest rate