Doing the right thing at the right time and reaping the fruits, may well become a reality for Bharti Airtel – which announced the launch of the first payments bank (Airtel Payments Bank Ltd) as a pilot in Rajasthan on Wednesday.

To begin with, the pilot project will run in 10,000 Airtel retail outlets in Rajasthan where customers will be offered an interest rate of 7.25 per cent on deposits in savings account.

Airtel Payments Bank is the first one to launch the services out of the 11 companies that got licenses from the Reserve Bank last year. According to analysts, such a move can be a win-win for the company after the Centre’s demonetisation move.

On asked how customers will benefit, Shashi Arora, Managing Director and Chief Executive Officer, Airtel Payments Bank, told BusinessLine : “We are trying to solve a problem for mass market customers who are under-banked and are looking for convenience in accessing a bank/ATM where they don’t have to trudge long distances. We believe this will boost the digital payments ecosystem hugely and reduce dependence on cash.”

Payments banks can accept a restricted deposit that is currently limited to ₹1 lakh per customer account, and cannot issue loans and credit cards, as per RBI. Both current account and savings accounts can be operated by such banks.

Arora said Airtel already offers services through the neighbourhood retailer who the customer is familiar with and through this launch the company was leveraging this network.

“We are also undertaking a drive to enrol over 1 lakh merchants in Rajasthan by the year-end, who will not be charged anything for accepting digital payments from Airtel Bank customers,” Arora added.

According to Prashant Singhal, Global Telecommunications Leader at EY: “At this stage, anything to do with digital cash is a winner. This (Airtel launch) is also to do with un-banked people, which is fairly large in rural areas, to create bank accounts. It is great timing to launch the service.”

Having said that he also mentioned that eventually, customers have to see what incremental value they are getting from this service because as per RBI guidelines, one can deposit up to only ₹1 lakh in the account.

“Payment banking will boost the move to ‘Digital India’ and will facilitate financial and geographical inclusion. But, cyber-security aspects need to be carefully addressed,” said Hemant Joshi, Partner at Delloitte Haskins & Sells LLP.

According to Airtel, a wide network of merchants (sellers/shops) across Rajasthan will accept digital payments from Airtel Bank from day one, offering customers the convenience of cashless purchase of goods and services via their mobile phones in a quick and secure manner. Airtel Banking points will offer bank account opening services and cash deposit and withdrawal facilities, it said.

The quick process to open an account is also paperless by using Aadhaar based e-KYC (know your customer), which requires no documents at all and customer’s Airtel mobile number will be his/her bank account number.

Like other banks, customers can also transfer money to any bank account in India (free money transfer from Airtel to Airtel numbers within Airtel Bank), the company said.

It also offering personal accidental insurance of ₹1 lakh with every savings account and easy deposit and withdrawal facility across a wide network of Airtel retail outlets, it said.

Anyone (non-Airtel customers also) with an Aadhaar card can open a savings account with Airtel Bank. It does not offer ATM/debit card facility, at present, so they can deposit/withdraw cash at any of the designated Airtel retail outlets, which will also function as Airtel banking points. Customers can check their account balance, access other services using Airtel Money app, USSD or IVR over their mobile phones, the company added.

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