Airtel Payments Bank on Thursday launched its nationwide operations with an initial investment of Rs 3,000 crore and offering an interest rate of 7.25 per cent for savings accounts.
“Starting today, over 250,000 neighbourhood Airtel retail stores across the country will also function as banking points, and customers will be able to open savings accounts, deposit and withdraw cash across any of these banking points,” Chairman, Bharti Enterprises, Sunil Bharti Mittal said here at the launch.
The payments bank was launched by Finance Minister Arun Jaitley.
Leveraging Airtel’s existing user base of 260 million customers, the payments bank users will have the phone number itself as the account number, Mittal said.
“Airtel Payments Bank commits an initial investment of Rs 3,000 crore to develop a pan India banking network and digital payments ecosystem,” a company statement said.
“The bank is offering an interest rate of 7.25 per cent per annum on deposits in savings accounts,” it added.
The money transfer from Airtel-to-Airtel numbers within Airtel Payments Bank will be free. The bank will not will charge any processing fee from its customers and merchant partners for digital transactions, it said.
The account opening will be done using customer’s Aadhaar and a free personal accidental insurance of Rs 1 lakh will be provided with every savings account, it added.
The user will get one minute of Airtel mobile talktime for every rupee deposited at the time of opening a savings account, the bank said.
The Reserve Bank of India had given payments bank licenses to 11 companies out of which 4-5 are telecom firms.
Executive Vice Chairman and MD, Kotak Mahindra Bank, Uday Kotak which is a 20 per cent shareholder in the Airtel Payments Bank, said: “The cost of opening a bank account and banking is extremely high in a traditional bank.”