Airtel Payments Bank Wiki

This is a wiki on Airtel Payments Bank and will cover the history and evolution of Payments bank, Airtel’s offerings and future prospects.

Airtel Payments Bank is the first entity in India to obtain final licence from Reserve Bank of India for launching a Payments Bank. It started its operations in November 2016 by launching pilot programme in Rajasthan.  Airtel Payments Bank Limited plans to leverage the massive distribution network of Bharti Airtel :

  • which is spread across 1.5 million outlets
  • having network presence spreading across 87% of the country
  • covering more than 400,000 villages
  • 5,000 census towns.

Airtel Payments Bank Limited is a company incorporated under the Companies Act, 2013 with its registered office at Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi – 110070, India. As of Feb 2017, the bank had opened 2.5 lakh banking points across the nation with a total customer base of two million spread across different geographies in India.

Payments Banks in India

Payment Banks in India are new bare-bones type of banks, which are expected to reach customers mainly through their mobile phones rather than traditional bank branches. They are “stripped down versions of banks that have existed for many decades.” Payment Banks will provide savings accounts and remittance services at a low transaction cost and is “a giant leap towards making financial inclusion a reality for every Indian.”

Payments banks:

  • will be able to accept deposits from individuals and small businesses of up to Rs 1 lakh per account.
  • will be mobile only banks and will not have full-fledged branches like State Bank of India, HDFC Bank etc.
  • issued cards can be used across the banking network and at any bank’s ATM for cash withdrawal.
  • are required to park 75 per cent of their total deposits in SLR securities and the balance 25 per cent in other instruments as prescribed by the RBI.

Evolution of Payments Bank in India

  • Sep 2013 – RBI forms Committee on Comprehensive Financial Services for Small Businesses and Low Income Households headed by Nachiket Mor
  • Jan 2014 – Committee submits report and recommends formation of new type of Bank.
  • Jul 2014 – RBI issued the draft guidelines for setting up Payments Bank in July 2014 and sought comments were sought from various participants by August 2014.
  • Nov 2014 – RBI released the final guidelines for licensing of Payments Bank on November 27, 2014.
  • Aug 2015 – RBI gives “in-principle” licences to eleven entities
    • Department of Posts
    • Aditya Birla Nuvo
    • Reliance Industries
    • Cholamandalam Distribution Services
    • FINO PayTech
    • Airtel M Commerce Services
    • National Securities Depository
    • Vijay Shekhar Sharma, Paytm
    • Tech Mahindra
    • Vodafone M-Pesa
    • Dilip Shanghvi, Sun Pharmaceuticals
  • Mar 2016 – Cholamandalam decides not to float Payments Bank
  • May 2016 – Dilip Shanghvi of Sun Pharma, IDFC Bank and Telenor Financial Services announce that they were not interested in establishing Payments Bank
  • Nov 2016 – Airtel Payments Bank starts maiden operations in Rajasthan.
  • Jan 2017 – Paytm gets RBI approval for payments bank.
  • Feb 2017 – In order to help create an access point of financial services across the country, the information technology ministry is in discussion with payment banks to enable common services centers (CSCs) to act as business correspondents (BCs).

Airtel Payments Bank

Account and Interest Rate

  1. A person’s Airtel mobile number is also his account number. “Account” refers to the Customer’s savings account or Wallet or any other type of account so designated by the Bank to be eligible account(s) for the operations.
  2. Customer is permitted to maintain and operate only one Bank Account.
  3. Interest on bank account is 7.25%
  4. Instant Account Opening – one can open an account in less than 3 minutes with nothing more than a scan of the finger.
  5. Bank pays interest quarterly at published interest rates on the daily end of day balance in the savings accounts.

Customer

  1. A Customer may avail Bank services by approaching Banking Points and through Internet Banking as well.
  2. The maximum savings account balance at the end of the day shall not exceed INR 1,00,000/-(Rupees One Lakh). In case the limit is exceeded, the balance in addition to one lakh rupees will not accrue interest.
  3. In case of death of a Customer, the Bank shall follow the due process /procedure to pay the money lying in the Account of the deceased.
  4. Nomination facility is available in Airtel Payments Bank account.
  5. In case the mobile phone/ SIM card associated with the Bank services is lost/stolen/misplaced/ no longer in the Customer’s control or possession or is not operational, the Customer has to immediately inform Bank through its call centres or email registered with the Bank.

Charges

Account Opening – Free
Cash Deposit / Load Cash (Internet banking, Mobile App & Banking Points) – Free

Service Rs
Cash Withdrawl
>=10 to <=100 1
>100 to <=500 5
>500 to <=1000 10
>1000 to <=2000 15
>2000 to <=3000 20
>3000 to <=4000 25
> = 4000 0.65% of withdrawal amount
Funds Transfer
Within Airtel Payments Bank (Internet banking, Mobile App & USSD) FREE
From Airtel Payments Bank to another Bank (Internet banking, Mobile App & USSD) Up to & including 1000 FREE
From Airtel Payments Bank to another Bank (Internet banking, Mobile App & USSD) for amounts > 1000 0.5% of amount transferred
Set-off balance* * 50

Description  Limits (Rs)
Minimum Cash Deposit Amount                    10
Minimum Cash Withdrawal Amount                    10
Minimum Amount for Funds Transfer (Internet banking, Mobile App & USSD)                    10
Maximum Cash Deposit per day at a Banking Point            49,990
Maximum Savings Account Balance          100,000
Maximum Money can be added using Debit Card per day            25,000
Transaction limit on a transfer to another Airtel Payments Bank account          100,000
Transaction limit on a transfer to a non-Airtel Payments  Bank account through NEFT          100,000
Transaction limit on a transfer to a non-Airtel Payments  Bank account through IMPS          100,000
Maximum number of transfers to non-Airtel Payments Bank  accounts per day                    10
Maximum number of transfers to non-Airtel Payments Bank  accounts per month                    25
Maximum number of transactions allowed per month            10,000

Other Features

  1. For every Rupee that you deposit, you get equivalent talk time.
  2. Free personal accident insurance cover of Rs. 1 Lac.
  3. Airtel Payments Bank (APB) plans to sell third party financial products like insurance and MF products.

Future Plan

Airtel Payments Bank has plans to invest Rs 3,000 crore and to convert at least 10 crores out of its 27 crores, Airtel customers with the bank. MasterCard is providing payment processing solutions to the bank.

References

Image: http://techone3.in/tag/airtel/

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A Few Last Words

Before making any investment decision, please contact your financial adviser.

I have provided this article for educational purpose only.

I hope you found this wiki on Airtel Payments Bank useful. If you have something to add please leave a comment in the post. Please feel free to contact me.

Subhodeep Mukhopadhyay

I am a Management Consultant in the Education Sector. In my previous corporate career, I have worked in Banking, Private Equity and Software industry. I am an MBA in Finance/ Computer Engineer and enjoy doing equity research and financial analysis in my free time.

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