Country’s largest telecom operator Bharti Airtel Ltd started a pilot service of its proposed payments bank in Rajasthan, making it the first company to do so since the grant of licences by the Reserve Bank of India (RBI).
This comes in the backdrop of the National Democratic Alliance government’s demonetisation plan which is aimed to curb black money from the system and also to move the country towards a cashless economy.
Bharti Airtel’s subsidiary, Airtel Payments Bank Ltd (Airtel Bank) rolled out the pilot to test systems and processes ahead of a full-scale pan-India launch, noted a company statement released on Wednesday.
People can open bank accounts at Airtel retail outlets, which will also act as Airtel banking points. A customer’s Airtel mobile number will be her bank account number and the company will offer an interest rate of 7.25% per annum on deposits in savings accounts. There will be a personal accident insurance of Rs.1 lakh with every savings account. Currently, Airtel Bank is not offering debit card facility but one can deposit or withdraw cash at any of the designated Airtel retail outlets.
Airtel Bank commenced the pilot with banking points at 10,000 Airtel retail outlets. It plans to expand its merchant network in Rajasthan to 100,000 by the end of the year.
“Airtel Bank is a fully digital and paperless bank. Airtel banking points will offer bank account opening services and cash deposit and withdrawal facilities. Accounts will be opened using Aadhaar-based e-KYC,” the statement said.
Rajasthan’s chief minister Vasundhara Raje in the statement said, “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.”
Shashi Arora, the managing director and chief executive officer of Airtel Payments Bank, in the company statement said, “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. We would also like to use feedback from our customers to further improve our processes and look forward to serving them.”
On 11 April 2016, Airtel Bank became the first entity in India to receive a payments bank licence from RBI. The entity plans to leverage Bharti Airtel’s extensive national distribution network of over 1.5 million retail outlets, with deep penetration in rural areas.