Finance Minister Arun Jaitley inaugurated Airtel Payments Bank of Bharti Enterprises, which is being rolled out across the country with an investment of Rs 3,000 crore. “As more and more telecom companies enter the fray, I think we will hopefully see competition not only amongst telecom companies which we read a lot about these days but we will probably see competition between conventional and the new mode of banking that you are going to introduce,” Jaitley said at the launch.
Bharti Enterprises Chairman Sunil Bharti Mittal said this is the first payments bank which will be opened across 29 states in India by leveraging retail partners of Airtel. The focus of the payments bank will be to serve people in rural and semi-urban areas, he added.
“With Airtel Payments Bank, we are starting another important chapter in our journey, with the potential to truly transform lives and contribute to financial inclusion in the country,” Mittal said.
Airtel is offering 7.25 per cent interest per annum initially to attract customers, who can deposit up to Rs 1 lakh in their accounts.
Customers will be able to operate their accounts with the help of a mobile application, and withdraw and deposit money at authorised retail outlets.
The interest rate is a welcome offer and will come down in the future as subsidisation cannot continue for long, Mittal said.
Without naming Paytm, which is set to launch its payments bank, he said, “They will have to go through processes that we have gone through. We have few months with us. There will be competition which we can meet head on like we have done in telecom.”
Mittal added that Bharti holds 80 per cent stake in the payments bank, while the rest is held by Kotak Mahindra Bank.
“We have invested around Rs 1,000 crore. We are looking at total investment of Rs 3,000 crore over a period of time. We will look at getting some more equity partners but there is no immediate plan as of now,” Mittal said.
He said that Airtel and Kotak Mahindra Bank will follow RBI guidelines on shareholding dilution, which requires shareholding by promoters in the bank to be brought down to 40 per cent within three years from the date of commencement of business of the bank.
Kotak Mahindra Bank Vice Chairman Uday Kotak said the cost of opening a bank account is extremely high in conventional banking while it is low in non-traditional or differentiated banking system. (MORE) PTI PRS DP
He said that Airtel Payments Bank will sell Kotak Mahindra Bank products like mutual funds and insurance in the future.
The account can be opened by visiting retail outlets authorised for Airtel Payments Bank (APB) service where an individual will need to just share his or her Aadhaar number.
APB Managing Director and CEO Shashi Arora said the bank will look at reaching out to customers across 6 lakh retail outlets in a year.
“We are starting operations with 2.5 lakh outlets.
Customers having Airtel Payments Bank account will be able to transfer money to any bank or mobile wallet. There will be no charge on money transferred between Airtel to Airtel account,” Arora said.
He also said that people can open their accounts in just three minutes with the help of Aadhaar.
“There will be no need to submit paper documents. People only need to share their Aadhaar number for customer verification. We are also taking PAN number which in the back-end gets validated from NSDL,” Arora said.
Mittal said a target has been set to convert 100 million of the 270 million Airtel customers to APB account holders.
“We have been running pilot across four states and after demonetisation, response has been heartening,” Mittal said.
Airtel first started its payments bank pilot in Rajasthan across 10,000 retail outlets on November 23, 2016. It later rolled out pilot services in Karnataka, Andhra Pradesh and Telangana. APB added 1 million customers during the pilot phase.
Source: dnaindia.com