“Cost of opening a bank account and serve the services in a traditional bank is tremendously high,” said Uday Kotak, executive chairman and managing director of Kotak Mahindra Bank.
Sunil Bharti Mittal launched Airtel payments bank on Wednesday, in presence of finance minister Arun Jaitley.
Kotak’s statement is not something that should be disregarded. He has seen and run a financial services business since 1985, and later converted into a traditional bank, in partnership with Mahindra Group.
To be specific, Airtel through its payments bank will focus on small ticket accounts, of Rs 100, 500 and 1,000. This Kotak said needs to be done at high speed, which traditional banks “will never be able to do”.
Airtel will do no-documentation enrolment. The account opening will be based on Aadhaar based biometric paperless verification. The company aims to open an account in less than three minutes.
It is also providing free accidental insurance of Rs 1,00,000 for every new account holder. Using Airtel bank, customers will be able to pay at five million outlets. It’s mission statement is “every shop is like a bank”.
Kotak has partnered with Sunil Bharti Mittal promoted Airtel payments bank. Kotak Mahindra Bank holds 20% stake in the payments bank.