Airtel Payments Bank on Monday announced its customers will get an increased interest rate of 6 per cent per annum on savings account deposit of over Rs 1 lakh. The move follows Airtel Payments Bank becoming the first payments bank to implement an enhanced day-end savings limit of Rs 2 lakh, as per the Reserve Bank of India (RBI) guidelines, the company said in a statement.
Airtel Payments Bank has over 5.5 crore engaged users across its operations, the statement added.
The interest rate is at 2.5 per cent per annum for a deposit up to Rs 1 lakh.
Announcing the higher interest rate on savings account deposits of over Rs 1 lakh, Anubrata Biswas, CEO of Airtel Payments Bank, said, “RBI’s increased savings deposit ceiling is a major milestone for payments banks as this was a key ask from customers”.
With an “attractive” interest rate on deposit sums above one lakh, Airtel Payments Bank is making banking proposition even more rewarding, Biswas added.
“Our unmatched footprint of 5,00,000 banking points and a global first secure and simple experience delivered digitally, Airtel Payments Bank offers a market-leading proposition for both the urban digital and the rural underbanked customer,” Biswas pointed out.
The new interest rate regime is an important addition to the bank’s suite of solutions.
Customers can open an Airtel Payments Bank account within minutes with a video call from the Airtel Thanks app.
The bank offers a digital savings account – Rewards123, which offers more value to customers when they transact digitally using the account.
Active users are the people who transact with the payment bank or people who keep money with it.
Airtel Payments Bank has been witnessing roughly 5-7% month-on-month growth in its deposit base consistently for the last six months, its MD & CEO Anubrata Biswas said on Wednesday.
Currently, the bank has two crore active savings accounts. “During the pandemic our savings account customer base has increased, mainly in rural areas. Today, we are present in one lakh tier-VI villages. During Covid times people have really found value in this deep rural distribution,” Biswas told FE.
“We have seen roughly 5-7% month-on-month growth in deposit base consistently for the last six months,” he informed. Payments bank cannot undertake lending activities. These banks are allowed to invest minimum 75% of the customer deposits in government securities or treasury bills, and maximum 25% in current and time or fixed deposits with other scheduled commercial banks for operational purposes and liquidity management, according to the RBI’s guidelines for licensing of payment banks.
“The return from the government securities and the rates they offer will definitely be the future revenue driver for us,” Biswas said. Airtel Payments Bank is India’s first Payments Bank that launched in January, 2017. It became an associate of Bharti Airtel with effect from November 1, 2018.
The bank’s active user base has been growing around 60-65% on year-on-year basis. Active users are the people who transact with the payment bank or people who keep money with it.
“Currently we have an active user base of five crores. Especially, during Covid we have grown a lot in terms of active customer base, volume of transactions and revenues, among others. Our business correspondent network has really grown in size and scale. So, that business has grown. And, a lot of companies have realised that during this time they can use the technology and network that we provide for services. So, that business has also grown,” the MD said. According to Biswas, the bank’s total revenues grew substantially as Covid has led to rise in digital transactions, growth in institutional services and healthy growth in business.
“The increase in business is built on principle of access. We are running the largest banking network in the country today. We have 340,000 monthly active banking points. In terms of banking points, we are running roughly double the formal banking size across the country,” he informed, adding on institutional services segment the bank was offering cash services and cash management, and it would be the largest micro-cash services player in the country. After it introduced “Safe Pay” security feature in January this year to protect its customers from growing incidents of online payment fraud, around 2.5 lakh customers are using the product, which is optional. “Initially a lot of our existing customers switch it on. Then, new customers are coming everyday,” Biswas informed.
“This product is the first time in the country. A telecom company and a bank have come together to offer a solution, where the telecom network and the SIM of the users are linked to flash a message on the phone screen before the transaction is processed in the bank account,” he added.
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