The four functional payments banks (PB) in the country had demand deposits of Rs 236.45 crore at the end of September 30, BloombergQuint reports. Demand deposits refer to money in savings and current accounts.

The publication added that Airtel Payments Bank had the highest number of deposits with Rs 224.03 crore growing 26% from Rs 177.05 crore in August. At the end of FY17, Airtel PB had total deposits of Rs 68.33 crore. Meanwhile, Airtel said that it has around 20 million accounts and that the bank operation is seeing a throughput of Rs 1200 crore per month, in a recent earnings call. In Q2FY18, Airtel’s “Others” business in India (which includes payments bank) reported revenues of Rs 97.2 crore, up 8% year-on-year (YoY), as per its quarterly report.

The report added that Fino held Rs 6.8 crore while Paytm Payments Bank held deposits of Rs 3.5 crore as on September 30.

Note that Fino PB and Paytm PB started operations in July and May this year respectively, Airtel Payments Bank began its operations in November 2016. India Post Payments Bank has started its operations in a pilot mode with 8 access points in Raipur and Ranchi but is yet to commence full operations.  India Post PB has issued 1619 Debit Cards so far: around 832 in Jharkhand and 787 in Chhatisgarh. Remember, payments bank’s accounts can only hold Rs 1 lakh.

Vodafone India will soon be merging with Idea Cellular; however, both the companies have not discussed what they will do with their PB licences. Reliance Jio has delayed its payments bank operations.

Differing strategies

Airtel, Fino and Paytm all have opted for differing strategies for their bank operations.

  • Airtel PB is offering customers an interest of 7.5% on deposits, the highest even among commercial banks. But Airtel is looking at a becoming a digital bank and does not even issue a physical debit card and charges customers who wish to withdraw cash from outlets.
  • Fino, on the other hand, is not looking to offer such high interest and will offer something that is comparable to commercial banks. However, CEO Rishi Gupta says that Fino wants to be “D-Mart of banking” and is looking at facilitating loans in the microfinance sector through self-help groups (SHG) along with the sale of insurance and other third-party tie-ups. Payments banks are not allowed to give out loans from their own books but can tie-up with other financial institutions to offer loans and other products.
  • Paytm is also not in the high interest game and will offer 4% on deposits. Paytm says that it will offer most digital transactions for free including NEFT, IMPS and UPI. However, anything offline has charges: there’s an annual subscription of Rs 100 + delivery charges for an offline debit card (and replacement), and a Cheque book with 10 leaves costs Rs 100 + delivery charges. Free ATM transactions are limited: 3 free monthly if you’re in a metro, and 5 in a non-metro, and Rs 20 per cash withdrawal and Rs 5 per balance check/mini statement thereafter. Recently, Paytm partnered with ICICI Bank to offer short-term, interest-free, personal loans for users.