Airtel Payments Bank now has UPI facility for free transfers

A payment bank differs from regular banks as it is allowed to undertake only restricted banking functions.

These functions include payments and remittance services, internet banking, selling of insurance/mutual funds and functioning as business correspondent of other banks.

A payment bank can accept deposits only upto Rs.1 lakh and won't be allowed to issue credit cards.

On 12th Jan, Finance Minister Arun Jaitley launched the Airtel Payment bank; the bank was till now running as pilot projects in four states.

Airtel Bank was the first entity in India to receive a payments bank licence from the Reserve Bank of India, in April 2016.

People can open their account using Aadhaar based, paperless e-KYC service.

Airtel Bank will offer basic services like account opening, withdrawal facilities and cash deposits.

Everyone regardless of being an Airtel subscriber can open an account.

Its services will include money transfers to bank accounts, accident insurance with every savings account and 7.25% p.a. interest on deposits.

However, given that it is a 'payments bank' Airtel Bank is not authorized to provide lending services.

Residents in towns and villages in Rajasthan will be able to open bank accounts at Airtel retail outlets.

No documents will be required to open bank accounts; only the Aadhaar based e-KYC will be needed.

Their Airtel Mobile number will be their bank account number as well.

Airtel Bank proposes to have a network of 100,000 merchants across Rajasthan that will accept digital payments.

Airtel Payments Bank has become the first payments bank to integrate UPI on its digital platform. Now customers will be able to create their own UPI handles and make transactions free of charge.

Earlier, customers without UPI were charged minor amounts for transferring money to accounts.

Currently, a wide category of merchants accepts UPI payments. Customers can simply scan UPI QR code at shops.