Bharti Airtel will launch its payments bank operations starting today after its initial pilot launch in Rajasthan in November last year, according to this Mint report. The pilot service was later extended to Telangana and Karnataka as well. The report said that during pilot-mode Airtel added more than 1 lakh new customers opening a savings account within two weeks of launch.
The launch is scheduled to take place today in Delhi. It is not yet clear if the launch is nation-wide or in select states. We will update the story once we receive more updates from Airtel.
During the pilot-launch, Airtel said it will provide an interest rate of 7.25% per annum on savings deposits, which is relatively higher than the rates offered by other private banks. Note that a payments bank account can hold only Rs 100,000 as of now. In addition to this, Airtel was providing customers one minute of talk time on their Airtel mobile for every Rupee deposited as promotion, applicable to first time deposits.
Airtel allows free money transfer between Airtel numbers holding a payments bank account. This could mean that extra charges will apply if transfer is made to another Airtel payments bank holder who is not an Airtel subscriber. Airtel Payments Bank also allows money transfer to any bank account in India. However, Airtel clarified last month it will impose a 0.65% cash withdrawal fee on transactions for its account holders in order to discourage the use of physical cash.
Other players in the payments back space
Note that Airtel’s payments bank launch comes at a time when Paytm received final license from RBI last week to operate its own payments bank. The company earlier mentioned that it would be shifting its wallet customers to the payments bank, although a definite timeline was not mentioned.
Down to 8 companies: Apart from Airtel and Paytm, Vodafone, Reliance Industries, Idea Cellular, Paytm, FINO Paytech, India Post and National Securities Depository Limited all have licenses operating a payments bank. Tech Mahindra said that it would not be pursuing a payments bank business back in May last year. 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.