Aditya Birla Group-owned Idea Cellular on Thursday announced the commencement of operations of the Aditya Birla Idea Payments Bank in India. The Reserve Bank of India (RBI) issued the licence to Idea Cellular Payments Bank under Section 22 (1) of the Banking Regulation Act of 1949. Idea, in partnership with Aditya Birla Nuvo, was one of the 11 applicants who were issued approval to open a payments bank back in August 2015. Reliance Jio is also expected to commence similar operations soon.
Idea Cellular is the latest to join the ranks of Bharti Airtel, India Post, and Paytm in opening a payments bank in India. While the payments bank has been incorporated, there is currently no information on interest rates and services offered by Idea. We've reached out for more information on this front. Sudhakar Ramasubramanian is the current CEO designate for Idea Payments Bank.
A payments bank is a banking institution that offer services such as current accounts, savings accounts, and demand deposits (up to Rs 1 lakh). This category of banks can also issue ATM/ debit cards. However, payments banks are not allowed to extend loans and credit cards to customers.
Bharti Airtel was the first to enter the scene in India with the Airtel Payments Bank launched back in January 2017. The bank currently continues to offer 7.25 percent interest rate on savings accounts, a rate announced at launch.
Even Paytm announced the Paytm Payments Bank in May 2017. It currently offers an interest rate of 4 percent on savings accounts. A physical RuPay debit card is also available at a price of Rs. 100. India Post, on the other hand, offers a 4.5 percent on savings account opened up with the government-owned postal department's payments bank.