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Airtel rolls out payments bank, commits 3K-cr

With the countrywide launch, Airtel would look to leverage its network of 2,50,000 retail stores, which would double up as banking points for the payments bank across 29 states.

By: ENS Economic Bureau | New Delhi | Published: January 13, 2017 2:00:15 am
arun jaitley, airtel, airtel bank payments, Bharti Enterprises Chairman Sunil Bharti Mittal,Kotak Mahindra Bank,  Airtel Payments Bank, india news, latest news New Delhi: Union Finance Minister Arun Jaitley with Bharti Enterprises Chairman Sunil Bharti Mittal and Kotak Mahindra Bank, Executive VC, Uday Kotak during the launch of Airtel Payments Bank in New Delhi on Thursday. PTI Photo 

Airtel Payments Bank, an 80:20 joint-venture between the country’s largest telecom operator Bharti Airtel and Kotak Mahindra Bank, was rolled out with pan-India services on Thursday, with an initial investment commitment of Rs 3,000 crore. The entity became the first payments bank to go live in the country. With the countrywide launch, Airtel would look to leverage its network of 2,50,000 retail stores, which would double up as banking points for the payments bank across 29 states. This is more than the 2,00,000 ATMs in India.

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“Airtel Payments Bank aims to take digital banking service to the unbanked over their mobile phones in a quick and efficient manner. Millions of Indians in rural areas will get their first formal banking experience with Airtel Payments Banks,” Sunil Bharti Mittal, chairman of Bharti Enterprises said at the launch here. He added that during the pilot phase, 35,000 accounts were added every day to Airtel Payments Bank.

“Once we launch the bank, we would cross about 1,00,000 to 2,00,000 accounts every day. And it is a target within Airtel to convert at least 100 million out of our 270 million customers with Airtel Payments Bank accounts,” Mittal said.

However, he did not give a timeline for the 100-million-target.

Airtel first started its payments bank pilot in Rajasthan across 10,000 retail outlets on November 23. It later extended the pilot programme to Karnataka, Andhra Pradesh and Telangana. Airtel Payments Bank had added 1 million customers during its pilot stage.

With an aim to build a wider customer base, Airtel Payments Bank is offering interest rate of 7.25 per cent per annum on savings deposits, which was higher than the 10-year bond yield of 6.377 per cent as on Thursday. Most conventional banks offer interest rates ranging between 3-4 per cent on savings deposits.

In 2015, 11 firms had received an in-principle approval from the RBI to offer payments bank services. Of these, three entities had surrendered their licenses citing lack of business sense with the model. Besides Airtel, other telecom firms involved with payments bank are Idea Cellular, which has tied up with its sister-company Aditya Birla Nuvo, Vodafone India, and Reliance Jio, which has formed a JV with State Bank of India.

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