New concept of banking system has been launched in India. It is one more step towards digital India. That is payment bank. The standard norms for any Payments Banks is "A Payment Bank will be considered as scheduled banks once they are fully operational, and if found suitable under the section 42 (6) (a) of the Reserve Bank of India Act, 1934.
Airtel Payments Bank, the first telecom industry come out to run a bank and commence operation in the country on Thursday, 12th January 2017, with a promise to pay an interest rate of 7.25 per cent on deposits in savings accounts.
Finance minister Arun Jaitley formally launched Airtel Payments Bank Ltd on Friday 13th January 2017 in New Delhi.
Airtel Payments Bank Ltd is
a joint venture between Bharti Airtel Ltd (80.1 per cent) and Kotak Mahindra Bank (19.9 per cent) and dicided to invest ₹3,000 crore to build a pan-India banking network provided customers to operate accounts from their phone. The company is expecting that the payments bank went live with a network of 250,000 banking points in the pilot phase and added with over 1 million customers.
Let me clear first for my readers. what is payment bank so A payments bank is a differentiated bank which allows customers to open only a savings account with a deposit up to Rs 1 lakh at any given point. One restriction is also thare that the customers can maintain and operate only one bank account in this payment banking system.
According to the official website of Airtel Paymeny Bank, It is decided that there are no charges on cash deposits but in the case of cash withdrawal, customers have to pay Rs 5-25 if the amount is between Rs 10 and Rs 4,000, and if the withdrawal amount is above Rs 4,000, customers have to pay 0.65% of the withdrawal amount.
For example if a customer withdraws Rs 10,000 from the Airtel payment bank he will have to pay Rs 65 as a charge.
In the case of transfers of funds,
If it is within Airtel Payments Bank via Internet banking, mobile app or unstructured supplementary service data, it is free of cost.
If the fund transfers from Airtel Payments Bank to other banks incur a charge of 0.5% of the amount transferred.
To make the above statement understandable - The bank will allow transfer of money to any bank account in India at a cost, but money transfers from an Airtel number to another Airtel number within the Payments Bank will be free.
Airtel come out with an offer to attract their customers that
one minute of telecom talk time for every rupee deposited at the time of opening an account as well as free personal accidental insurance of ₹1 lakh with every savings account.
Sunil Bharti Mittal Chairman Bharti Enterprises added in their statement that “Airtel Payments Bank aims to take digital banking services to the unbanked over their mobile phones in a quick and efficient manner. Millions of Indians in rural areas will get their first formal banking experience with Airtel Payments Bank.”
The Airtel Payments Bank will be operate across all states, Initially, it will have 250,000 banking points, which will be scaled up to 600,000 in the current year.
The accounts in Airtel Payment Bank will be opened by using e-KYC, and customer's Aadhar number is necessary.
The bank has rolled out USSD short code for account holders to carry out banking transactions and there are no charges for USSD transactions or to check balance and depositing money into the account. But the charge is there when a customer makes a physical cash withdrawal. As we discuss earlier.
In this banking system customer will be able to withdraw cash only at the banking retail points. The bank will not offer debit cards to their customers and the company added in their website that this will also push their account holders towards cashless transactions.
The final approval from Reserve Bank of India (RBI) for the payment banking system will be come in April and likely to be launched on pilot basis for its operations in Rajasthan in November.
Payments Bank cannot offer full fledged banking services. They are restricted to holding a maximum balance of Rs. 1 lakh per individual customers and cannot offer loans. The payment bank however allowed to issue ATM/debit cards and other prepaid payment instruments, but not credit cards. These banks can also distribute non-risk sharing simple financial products like mutual funds and insurance products.
The aim behind this type of banking system is to reach out to the unbanked population of the country, many of which live in very small towns and villages and the purpose is as under
Mobile banks:
In the true sense, the payments banks will be on mobile only which mean they will not have full-fledged branches like an SBI, ICICI Bank or HDFC Bank. The account holders will be able to operate their accounts using the mobile app.
Small savings and small loans:
Up to Rs 1 lakh of deposits can be made in a payments bank account and the bank will Also be able to give loans up to Rs 1 lakh, targeted especially small merchants.
ATM and debit cards:
The cards issued by the payments bank can be used across the banking network and at any bank’s ATM for cash withdrawal.
Mobile services:
It allows transfers and remittances through the mobile, offers services such as automatic payments of bills, cashless purchases, chequeless transactions through a phone, and money transfer directly to bank accounts at no cost.
Saving account and interest:
Like any normal bank account, the payments bank account holder will also earn interest on the balance in their savings account.
As we know that Airtel has launched its Payments Bank. If any body want to register himself for Airtel’s Payments Bank, he does not need to go anywhere or submit any kind of documents. It is a paperless approach, using Aadhaar-based e-KYC and he can become a member of the Payments Bank within a few minutes with just a few clicks.
Anybody who is an Airtel user, having an Aadhaar card, PAN card and carrying a smartphone with Internet connectivity can become a member of Airtel’s Payments Bank and earn an interest of 7.25% p.a by depositing a maximum of Rs.1 lakh.
Here I am giving steps to open an Airtel Payments Bank account:
New users need to login www. airtel.in/money from their phone or using a computer. An account is initially created at Airtel money website. Who are already a member of Airtel money and are using the wallet for making the transaction, only needs to update their app to use the payments bank facility.
1. Once the website has been opened, the user need to click on registration and provide all the details. The mobile number will be the account number for the purpose of Payments Bank.
2 Create a mPIN for security purpose and do not disclose the mPIN to others.
3 After entering the details click on the submit button and generate OTP. for authenticating and verifying the user.
4 After entering the OTP the user will be the successful registered for using Airtel app for transferring money and the user is getting a successful registration message.
5 Download the app and make use of payments bank. (There is only one app from Airtel which provides the user all the facilities including mobile summary related to calls and data usage, wallets and payments bank for making a transaction.)
6 By adding money to the payments bank and earn interest. Please note that "Adding money in ‘My Airtel’s’ account will not give any interest because it is a wallet."
7 The user need to further validate their payments bank section in the app using the Aadhaar number, PAN card and nominee name before adding money to earn interest.
8 Adding money to the users account is free of cost.
9 The user can send money to any person, merchants, user, and banks which will not apply any additional charges when transferring money up to Rs.10000 per day.
10 An additional charge of 0.5% will be levied if transactions are made over and above Rs.10000 during a day. There is no capping or additional charges levied for making transactions between Airtel’s Payments Bank. It’s free.
Prepaid users can also open an account in Airtel payment bank and get free minutes for the first time up to the maximum capping of Rs.500. For example, if the user added Rs.200 for the first time in their payments bank account, he will get 200 free minutes. Or the user added Rs.500 for the first time to their payments bank account, he will get 500 free minutes. But, if the user added Rs.700 for the first time to their payments bank account, he will get 500 free minutes only.
The validity of free minutes will be one month. The company give this offer up to 31st March 2017 only.
Now one question come in my mind
Why are users going take this service?
Is it a digital wellet service like Paytm or Mobilwil?
The answer is very simple the payment banking system has several additional features apart from just paying to merchants. Let’s once again take a close look at all the advantages of Airtel Payments Bank when compared to other digital wallet apps such as Paytm, Mobikwik, and Oxigen.
1) Banking Points for Cash Deposits/Withdrawals
To encourage people to deposit money in Airtel Payments Bank, Airtel has announced a new offer where the company is offering one minute of Airtel to Airtel free talk time on their number for every one rupee the user deposits/withdraws from his account.
2) An Interest Rate of 7.25%
Airtel is offering an interest rate of 7.25 percent for all the people who open an account in their Payments Bank, which is a very big feature that is missing from other wallet or apps.
3) Transaction Limit of 1 Lakh
With the Airtel Payments Bank account, every user can transact upto the limit of Rs. 1 lakh per month, whereas other payment apps allow only up to Rs. 20,000.
4) Free Talktime
As said earlier, Airtel is offering one minute of Airtel to Airtel free talk time for every one rupee of money deposit/ withdraw from the account.
5) Accidental Insurance of 1 Lakh
Another huge benefit in getting an Airtel Payments Bank account is it offers an accidental insurance of 1 lakh, which no other apps offer in the same segment.
6) Works on All Handsets
Airtel Payments Bank collaborates with every handset irrespective of Android version or other issues. While Paytm operates on every handset, Mobikwik and Oxigen doesn’t work on some devices as they have some compatibility related issues.
7) OTP Based Secure Transactions
All the transactions made through Airtel Payments Bank requires an additional two-step verification. other apps also have support for this two-step verification, but they’ll ask the OTP for just the first time.
The Airtel Payments Bank service is currently available in only limited states, but company likly to expend their services shortly.
Airtel Payments Bank, the first telecom industry come out to run a bank and commence operation in the country on Thursday, 12th January 2017, with a promise to pay an interest rate of 7.25 per cent on deposits in savings accounts.
Finance minister Arun Jaitley formally launched Airtel Payments Bank Ltd on Friday 13th January 2017 in New Delhi.
Airtel Payments Bank Ltd is
a joint venture between Bharti Airtel Ltd (80.1 per cent) and Kotak Mahindra Bank (19.9 per cent) and dicided to invest ₹3,000 crore to build a pan-India banking network provided customers to operate accounts from their phone. The company is expecting that the payments bank went live with a network of 250,000 banking points in the pilot phase and added with over 1 million customers.
Let me clear first for my readers. what is payment bank so A payments bank is a differentiated bank which allows customers to open only a savings account with a deposit up to Rs 1 lakh at any given point. One restriction is also thare that the customers can maintain and operate only one bank account in this payment banking system.
According to the official website of Airtel Paymeny Bank, It is decided that there are no charges on cash deposits but in the case of cash withdrawal, customers have to pay Rs 5-25 if the amount is between Rs 10 and Rs 4,000, and if the withdrawal amount is above Rs 4,000, customers have to pay 0.65% of the withdrawal amount.
For example if a customer withdraws Rs 10,000 from the Airtel payment bank he will have to pay Rs 65 as a charge.
In the case of transfers of funds,
If it is within Airtel Payments Bank via Internet banking, mobile app or unstructured supplementary service data, it is free of cost.
If the fund transfers from Airtel Payments Bank to other banks incur a charge of 0.5% of the amount transferred.
To make the above statement understandable - The bank will allow transfer of money to any bank account in India at a cost, but money transfers from an Airtel number to another Airtel number within the Payments Bank will be free.
Airtel come out with an offer to attract their customers that
one minute of telecom talk time for every rupee deposited at the time of opening an account as well as free personal accidental insurance of ₹1 lakh with every savings account.
Sunil Bharti Mittal Chairman Bharti Enterprises added in their statement that “Airtel Payments Bank aims to take digital banking services to the unbanked over their mobile phones in a quick and efficient manner. Millions of Indians in rural areas will get their first formal banking experience with Airtel Payments Bank.”
The Airtel Payments Bank will be operate across all states, Initially, it will have 250,000 banking points, which will be scaled up to 600,000 in the current year.
The accounts in Airtel Payment Bank will be opened by using e-KYC, and customer's Aadhar number is necessary.
The bank has rolled out USSD short code for account holders to carry out banking transactions and there are no charges for USSD transactions or to check balance and depositing money into the account. But the charge is there when a customer makes a physical cash withdrawal. As we discuss earlier.
In this banking system customer will be able to withdraw cash only at the banking retail points. The bank will not offer debit cards to their customers and the company added in their website that this will also push their account holders towards cashless transactions.
The final approval from Reserve Bank of India (RBI) for the payment banking system will be come in April and likely to be launched on pilot basis for its operations in Rajasthan in November.
Payments Bank cannot offer full fledged banking services. They are restricted to holding a maximum balance of Rs. 1 lakh per individual customers and cannot offer loans. The payment bank however allowed to issue ATM/debit cards and other prepaid payment instruments, but not credit cards. These banks can also distribute non-risk sharing simple financial products like mutual funds and insurance products.
The aim behind this type of banking system is to reach out to the unbanked population of the country, many of which live in very small towns and villages and the purpose is as under
Mobile banks:
In the true sense, the payments banks will be on mobile only which mean they will not have full-fledged branches like an SBI, ICICI Bank or HDFC Bank. The account holders will be able to operate their accounts using the mobile app.
Small savings and small loans:
Up to Rs 1 lakh of deposits can be made in a payments bank account and the bank will Also be able to give loans up to Rs 1 lakh, targeted especially small merchants.
ATM and debit cards:
The cards issued by the payments bank can be used across the banking network and at any bank’s ATM for cash withdrawal.
Mobile services:
It allows transfers and remittances through the mobile, offers services such as automatic payments of bills, cashless purchases, chequeless transactions through a phone, and money transfer directly to bank accounts at no cost.
Saving account and interest:
Like any normal bank account, the payments bank account holder will also earn interest on the balance in their savings account.
As we know that Airtel has launched its Payments Bank. If any body want to register himself for Airtel’s Payments Bank, he does not need to go anywhere or submit any kind of documents. It is a paperless approach, using Aadhaar-based e-KYC and he can become a member of the Payments Bank within a few minutes with just a few clicks.
Anybody who is an Airtel user, having an Aadhaar card, PAN card and carrying a smartphone with Internet connectivity can become a member of Airtel’s Payments Bank and earn an interest of 7.25% p.a by depositing a maximum of Rs.1 lakh.
Here I am giving steps to open an Airtel Payments Bank account:
New users need to login www. airtel.in/money from their phone or using a computer. An account is initially created at Airtel money website. Who are already a member of Airtel money and are using the wallet for making the transaction, only needs to update their app to use the payments bank facility.
1. Once the website has been opened, the user need to click on registration and provide all the details. The mobile number will be the account number for the purpose of Payments Bank.
2 Create a mPIN for security purpose and do not disclose the mPIN to others.
3 After entering the details click on the submit button and generate OTP. for authenticating and verifying the user.
4 After entering the OTP the user will be the successful registered for using Airtel app for transferring money and the user is getting a successful registration message.
5 Download the app and make use of payments bank. (There is only one app from Airtel which provides the user all the facilities including mobile summary related to calls and data usage, wallets and payments bank for making a transaction.)
6 By adding money to the payments bank and earn interest. Please note that "Adding money in ‘My Airtel’s’ account will not give any interest because it is a wallet."
7 The user need to further validate their payments bank section in the app using the Aadhaar number, PAN card and nominee name before adding money to earn interest.
8 Adding money to the users account is free of cost.
9 The user can send money to any person, merchants, user, and banks which will not apply any additional charges when transferring money up to Rs.10000 per day.
10 An additional charge of 0.5% will be levied if transactions are made over and above Rs.10000 during a day. There is no capping or additional charges levied for making transactions between Airtel’s Payments Bank. It’s free.
Prepaid users can also open an account in Airtel payment bank and get free minutes for the first time up to the maximum capping of Rs.500. For example, if the user added Rs.200 for the first time in their payments bank account, he will get 200 free minutes. Or the user added Rs.500 for the first time to their payments bank account, he will get 500 free minutes. But, if the user added Rs.700 for the first time to their payments bank account, he will get 500 free minutes only.
The validity of free minutes will be one month. The company give this offer up to 31st March 2017 only.
Now one question come in my mind
Why are users going take this service?
Is it a digital wellet service like Paytm or Mobilwil?
The answer is very simple the payment banking system has several additional features apart from just paying to merchants. Let’s once again take a close look at all the advantages of Airtel Payments Bank when compared to other digital wallet apps such as Paytm, Mobikwik, and Oxigen.
1) Banking Points for Cash Deposits/Withdrawals
To encourage people to deposit money in Airtel Payments Bank, Airtel has announced a new offer where the company is offering one minute of Airtel to Airtel free talk time on their number for every one rupee the user deposits/withdraws from his account.
2) An Interest Rate of 7.25%
Airtel is offering an interest rate of 7.25 percent for all the people who open an account in their Payments Bank, which is a very big feature that is missing from other wallet or apps.
3) Transaction Limit of 1 Lakh
With the Airtel Payments Bank account, every user can transact upto the limit of Rs. 1 lakh per month, whereas other payment apps allow only up to Rs. 20,000.
4) Free Talktime
As said earlier, Airtel is offering one minute of Airtel to Airtel free talk time for every one rupee of money deposit/ withdraw from the account.
5) Accidental Insurance of 1 Lakh
Another huge benefit in getting an Airtel Payments Bank account is it offers an accidental insurance of 1 lakh, which no other apps offer in the same segment.
6) Works on All Handsets
Airtel Payments Bank collaborates with every handset irrespective of Android version or other issues. While Paytm operates on every handset, Mobikwik and Oxigen doesn’t work on some devices as they have some compatibility related issues.
7) OTP Based Secure Transactions
All the transactions made through Airtel Payments Bank requires an additional two-step verification. other apps also have support for this two-step verification, but they’ll ask the OTP for just the first time.
The Airtel Payments Bank service is currently available in only limited states, but company likly to expend their services shortly.
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