Airtel has become the first payment bank to go live, a year and half after the Reserve Bank of India came up with a proposal for payment banks. The bank has been launched on Wednesday with services available across 29 states.
Over 250,000 neighborhood Airtel retail stores across the country will function as banking points and customers will be able to open savings accounts, deposit and withdraw cash across any of these banking points.
Airtel has partnered with Kotak Mahindra Bank for the venture with the latter having a 20 per cent and Airtel holding 80 percent equity stake in the venture. The bank will not charge any processing fee from customers and merchant partners for digital transactions.
Airtel will develop a nationwide ecosystem of over five million partners including small kirana stores, grocers, pharmacies and restaurants.
The customer's mobile number will be his/ her bank account number. Airtel will offer an interest rate of 7.25 per cent on deposits in savings account. It will also offer a free personal accident insurance of Rs 1 lakh with every savings account.
