New Delhi: Airtel Payments Bank, which has achieved 15 million customers within seven months of operations, is relying upon tie-ups with small and medium enterprises (SMEs) and the launch of Unified Payments Interface (UPI) to boost its customer base and increase digital transaction, given its tight revenue model.

Currently, 400,000 banking outlets of Airtel are enabled and customers can open accounts and remit money out of 1.5 million Airtel outlets.

The bank started operations in mid-January.

“Margins are very thin and we need large scale to survive. Because we don’t have branch network in strict sense, we are keeping cost of operation low," said Shashi Arora, managing director and chief executive of Airtel Payments Bank.

The bank is reaching out to SMEs through a salary portal, wherein salary will be directly credited into their bank account. Arora believes that when salary will come in digital format, the need to withdraw it all at once will come down and saving habits will be inculcated. There are millions of small enterprises in the country which the bank is targeting.

Airtel Payments Bank is offering highest interest rate of 7.25% among its peers, in a bid to attract more customers. Since the central bank rule states that 75% of deposits have to be invested in statutory liquidity ratio (SLR) securities, in which interest rates hover around 6.50%, the bank is open to lower down the interest rates depending upon change in the environment.

Payments banks have asked the Reserve Bank of India (RBI) to permit them to offer differential interest rates on deposits below Rs1 lakh, Economic Times reported. According to Arora, providing differential interest rate on below Rs1 lakh of deposits is still a question mark and they need more clarity from the central bank.

According to the central bank norms, different interest rates can be offered to customers only on deposits above Rs1 lakh.

“In our country, SIM penetration is deeper than the number of saving accounts. 1.2 billion SIMs have been issued compared to 75% of households having such accounts. Moreover, distribution reach is deep compared to bank branches or automated teller machines (ATMs)," added Arora.

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