Airtel Payments Bank, which piloted last month in Rajasthan, will be giving its customers one minute of talk time on their Airtel mobile for every Rupee deposited. Note that this is applicable for first time deposits only. For example, if a customer opens an account with a deposit of Rs 1,000 they will get 1000 minutes of free talk time.
An account on a payments bank will be allowed to hold a maximum of Rs 1 lakh according to Reserve Bank of India (RBI) guidelines. Technically, an Airtel Payments Bank customer should be able to get 1 lakh minutes of talk time if a customer deposits such an amount. However, an Airtel spokesperson clarified that the validity of the talk time will be only for 30 days.
Airtel added that it will be expanding its merchant network in Rajasthan to 100,000 by the end of the year. The pilot commenced with banking points at 10,000 Airtel retail outlets. It’s worth remembering that the RBI has mandated that a payments banks will be required to have at least 25% of physical access points including BCs in rural centres. Airtel has a retail distribution network of over 1.5 million retail outlets across India.
Currently, Airtel Payments Bank offers 7.25 % per annum on deposits in savings accounts and a customer’s Airtel mobile number will be their bank account number. It also offers personal accidental insurance of Rs 1 lakh with every savings account.
Airtel got its payments bank license from the RBI in April. Kotak Mahindra Bank bought a 19.9% stake in the payments bank for Rs 98.38 crore.
Down to eight other players
Apart from Airtel, Vodafone, Reliance Industries, Idea Cellular, Paytm, FINO Paytech, India Post and National Securities Depository Limited all have licences for these new generation banks. Tech Mahindra said that it would not be pursuing a payments bank business in May. In the same month, Sun Pharma promoter Dilip Shangvi who had partnered with IDFC Bank and telecom operator Telenor to start a payments bank, surrendered his license.
In March this year, Cholamandalam Investment and Finance Company had decided to abandon its plans to set up a payments bank, saying that the decision came from the board after “considering competition and other factors, including the long gestation period”.