Airtel Payments Bank Slashes Interest Rate To 4%

Airtel Payments Bank, the first such bank by a telecom operator, and the first one in the country, has slashed the interest rate on its savings accounts to 4%. The rate will be applicable from 1 September. The existing rate is 5.5% per annum.

This is the second time within a year that the company has brought down the interest rates on its savings accounts.

In February this year Airtel Payments Bank had reduced the interest rate for the first time since launch. When the bank was launched in January 2017, the company offered interest rate of 7.25% per annum on its savings accounts. A year later it was reduced to 5.5%, and now it will be offered at 4%.

When Airtel Payments Bank was launched, the company offered multiple benefits including digital debit card, Rs 1 lakh of personal accident insurance, ease of transacting between other banks and wallets, besides the interest rate of 7.25%.

The company had said during the launch of the payments bank that the bank will consider the market situation and modify the interest rate whenever required. However, it was not expected the payments bank will reduce the interest rate so soon and by this margin.

In the new structure, all other benefits remain valid except the rate of interest.

Post launch, the payments bank became an instant hit among the Indian consumers, mostly in rural areas, and the bank saw over lakhs of savings account opened within a week. The company has more payments bank outlets than the total number of ATMs in the country.

Unfortunately, the company got involved in a controversy and it was found that some of the banks executives were opening saving accounts without taking their consent. Their Aadhaar numbers were misused to do the e-KYC for opening of such accounts. A probe was ordered by the government authorities and, when found guilty, the bank was banned from opening any more accounts using e-KYC.

The company, however, last month got back the permission from UIDAI and other authorities to add new customers.

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