Airtel Payments Bank- History, Services, Digital payments, Awards, Insurance, and pension, Financials, Regulations, Banks, Criticism, NB inspire
Airtel Payments Bank is an Indian payments bank with its headquarters in New Delhi. The company is a subsidiary of Bharti Airtel.[ On 5 January, 2022, it was granted the scheduled bank status by Reserve Bank of India under second schedule of RBI Act, 1934.
History
In 2015, eleven companies received In-principle approval from the Reserve Bank of India to set up payments bank under the guidelines for Licensing of Payments Bank. Airtel was one of them, and it launched Airtel Payments Bank in September 2016. Airtel's first payments bank went live with its pilot project in Rajasthan in November 2016.
Airtel Payments Bank was launched in January 2017, by Bharti Airtel, India's largest telecom provider, to support the cashless revolution promised by the Government of India.
The bank's capital at its establishment was ₹3,000 crore (US$441 million). Airtel Payments Bank reported deposits of ₹68.33 crore at the end of the financial year ended 31 March 2017, which was its first year of operation.
On 11 April 2016, it became the first company to receive the payments bank license from the Reserve Bank of India under Section 22 (1) of Banking Regulation Act, 1949. Airtel Payments Bank is a 80:20 partnership between Bharti Airtel and Kotak Mahindra Bank.
Services
Digital payments
In September 2017, Airtel Payments Bank launched UPI enabled digital payments to facilitate secure digital payments. Customers need to link their bank accounts on BHIM before they can make UPI payments. For UPI-based payments and transfers, customers are not required to furnish their bank details to enable transactions.
Airtel Money is a digital wallet by Airtel Payment Bank that allows users to make payments using "My Airtel app" or USSD.
Insurance and pension
In July 2019, Airtel Payments Bank partnered with Bharti AXA General Insurance. Airtel Payments Bank and Bharti Axa Life Insurance have started to provide government's insurance plan Pradhan Mantri Jeevan Jyoti Bima Yojana in August 2018. In 2019, Airtel Payments Bank started offering Atal Pension Yojana (a Government of India initiative) through its platform.
Legal challenges
The Unique Identification Authority of India (UIDAI) suspended Bharti Airtel and Airtel Payment Bank's license for eKYC of Aadhar on 16 December 2017, following complaints from customers that their accounts were being opened without their consent. Some even received their LPG subsidies in their Airtel Payment Bank accounts. However, on July 12, 2018, Airtel Payments Bank received requisite approvals from the Reserved Bank of India and Unique Identification Authority of India (UIDAI) to resume on-boarding new customers using of Aadhaar-based e-KYC.
Financials
In 2018–19, Airtel Payments Bank reported a loss of ₹338 crores, while it registered a loss of ₹272 crore in the financial year 2017–18.In FY 20, its revenues rose 87% to ₹474 crores.
Awards
*IAMAI 7th India Digital Awards for Money Transfer Program 2017.
*Asian Banker Risk Management Award 2018.
Regulations
The minimum capital requirement is ₹200 crore. For the first five years, the stake of the promoter should remain at least 40%. Foreign share holding will be allowed in these banks as per the rules for FDI in private banks in India. The voting rights will be regulated by the Banking Regulation Act, 1949. The voting right of any shareholder is capped at 10%, which can be raised to 26% by the Reserve Bank of India. Any acquisition of more than 5% will require approval of the RBI. The majority of the bank's board of directors should consist of independent directors, appointed according to RBI guidelines.
The bank should be fully networked from the beginning. The bank can accept utility bills. It cannot form subsidiaries to undertake non-banking activities. Initially, the deposits will be capped at ₹100,000 per customer, but it may be raised by the RBI based on the performance of the bank. Payment Banks are not permitted to lend to any person including their directors. 25% of its branches must be in the unbanked rural area. The bank must use the term "payments bank" in its name to differentiate it from other types of bank. The banks will be licensed as payments banks under Section 22 of the Banking Regulation Act, 1949, and will be registered as public limited company under the Companies Act, 2013.
Banks
Bharti Airtel launched India's first payments bank named Airtel Payments Bank in March 2017.Paytm Payments Bank, India Post Payments Bank, Fino Payments Bank and Aditya Birla Payments Bank have also launched services.
Of the 41 applicants, the list of RBI approved for provisional payments bank licenses are:
Aditya Birla Nuvo Limited
Airtel M Commerce Services Limited
Cholamandalam Distribution Services Limited
India Department of Posts
Fino PayTech Limited
National Securities Depository Limited
Reliance Industries Limited (Jio)
Shri Dilip Shantilal Shanghvi (Sun Pharmaceuticals)
Paytm Payments Bank Limited
Tech Mahindra Limited
Vodafone m-pesa Limited
The following is the list of those who surrendered their license:
Cholamandalam Distribution Services
Sun Pharmaceuticals
Tech Mahindra
The following is the list of active payments banks:
Airtel Payments Bank
India Post Payments Bank
Fino Payments Bank
Jio Payments Bank
Paytm Payments Bank
NSDL Payments Bank
The following is the list of defunct payments banks:
Aditya Birla Payments Bank (26 July 2019)
Vodafone m-pesa Limited
Criticism
S. Kalyanasundaram pointed that the payments bank model is unviable due to restriction from lending and rules for cash reserve ratio and statutory liquidity ratio which leaves very little space for generating income for the payments banks.
See also
Airtel Payment Bank
Regional Rural Bank
Banking in India
Small finance bank
- Banks established in 2017
- Payments banks
- Payment service providers
- Mobile payments
- Mobile payments in India
- Indian brands
- 2017 establishments in Delhi
- Companies based in New Delhi
- Private sector banks in India
- Bharti Airtel
- Kotak Mahindra Bank
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