The Airtel Payments Bank – the first payments bank – has officially launched nationally on Thursday, at an event in New Delhi where Finance Minister Arun Jaitley, formally launched the bank. Airtel had earlier launched a pilot payments bank program in Rajasthan, across 10,000 Airtel retail outlets in the state. Airtel Payments Bank, a 80: 20 joint venture between Bharti Airtel Ltd and Kotak Mahindra Bank Ltd, said it will spend Rs3,000 crore to develop a pan-India banking network and digital payments ecosystem.
So, what is Payment Bank?
A payments bank is fully digital and customers can access services over mobile phones, including all feature and basic mobile phones. It offers basic banking including account-opening services and cash deposit and withdrawal facilities. Savings accounts are opened using Aadhaar-based e-KYC. This requires no documents and only the customer’s Aadhaar number is needed.
It is very lucrative to read that Airtel is giving highest interest rates to saving account holders (7.25%), but before you put your money in any of the elevn new payment banks including Paytm and Airtel, Commerce Duniya is analysing their pros and cons:
1. These banks are mobile only banks, which mean they will not have full-fledged branches like other popular banks. The account holders will be able to operate their accounts using the mobile app.
2. You can deposit a maximum of Rs 1 lakh in a payments bank account. Also, the bank will be able to give loans up to Rs 1 lakh, especially targeted at small level merchants.
3. The debit cum ATM cards issued by these payments bank can be used across the banking network and at any whitelabel ATM for cash withdrawal, similar to any normal card.
4. These banks allow transfers and remittances through the mobile and offer services such as automatic payments of bills, cashless purchases, chequeless transactions through a phone, and money transfer directly to bank accounts, etc.
5. Like any normal bank account, the payments bank account holder will earn interest on the balance in their savings account which will be relatively higher than the traditional bank accounts.
