After Rajathan, Bharti Enterprises-promoted Airtel Payments Bank has rolled out services in two more states – Andhra Pradesh and Telangana. Services have been rolled out across 8,000 Airtel retail outlets in Andhra Pradesh and 7,000 outlets in Telangana. About 70% of these outlets which are acting banking points are in rural areas. Shashi Arora, MD and CEO, Airtel Payments Bank, tells Anushree Bhattacharya the bank hopes to cross-sell products and earn from referrals in order to offset the high deposit rate of 7.25%. Excerpts…
About one lakh savings accounts were opened in less that two-weeks of rolling out services in Rajasthan. How are you using the telecom service to get more people on board?
Airtel has over 250 million customers across the country. Add to that the reach of 1.5 million retail outlets which will work as banking outlets for us across the country. We have the ability to reach towns with a 2,000 plus population where consumers largely are pre-paid mobile users and transact in cash. Also we have not imposed any restrictions such as average quarterly maintenance balance and do not charge for non-maintenance. Transaction costs are now at 0%. As per our scheme any customer opening a savings account with Airtel Payments Bank, will get one minute of talk time on his/her Airtel mobile for every rupee deposited.
What is the amount being deposited?
We insists that a person opens an account with at least R100. We are also seeing that people have now started doing their second and third deposits as well as cash withdrawals. The accounts are operating exactly like any bank account operates, with some people depositing less in the first round and increasing the deposit in the second round. We have transaction on all accounts.
With a rate of interest as high at 7.25%, how will you make money?
The high rate of interest is the way for us to attract new customers. We are a very young bank and our objective is to get scale and capitalise Airtel’s scale. While we are not allowed to lend, we are allowed to cross sell and earn a referral fee. For example we can tie up with a large lender or an insurance firm as its referral company.
Can you please share the profile of customers?
Compared to a metro, in a village, a person has to travel atleast 2-3 km to get cash either from an ATM or a bank. So this is where the largest focus of Airtel Payments Bank will be. This is where India belongs.
How do you plan to use the Airtel wallet to drive transaction?
One of our big objectives is to create a merchant eco-system. Our aim is to on-board over 3 million merchants by the end of this fiscal. We have kept the transaction fee at zero for merchants. This is because we are replacing cash. The moment there is a charge of even 10 paise, a merchant may get hesitant in using it. We want to ensure that even for smallest value transactions consumers as well as traders use the wallet.