Airtel Payments Bank is the first to offer a fully digital and paperless banking system in India

Telecom service provider Bharti Airtel has launched its Payments Bank in India, a fully digital and paperless banking system. The payments bank initiative was announced by Finance Minister Arun Jaitley and Airtel Chairman Sunil Mittal. Airtel's Payments Bank beats PayTM to market. The premier mobile wallet has also proposed a similar banking system slated for launch later this year.

Airtel Payments Bank will also eliminate paperwork for opening accounts by using Aadhaar card and biometric authentication for sign up process. Since it's a digital banking platform, the phone number becomes the account number of the user. The Airtel Payments Bank will not charge a processing fee from its customers or merchant partners for digital transactions. The service will encourage more users to adopt cashless transactions. Airtel has clarified that there will be no charges for cash withdrawals either, at least for now. Also, the Rs. 4500 cap on ATM withdrawals, which is active right now, will not apply to Airtel's Payments Bank. The monthly withdrawal limit will be the same as specified by RBI, though.

Airtel says its retail stores across the country will serve as banking points. The company added that the service starts today with over 6 lakh banking points, where users can open savings accounts, deposit or withdraw cash.

"We are products of competition. We are taking a big leap. We have a few months with us before others get their feet in the space," said Sunil Mittal. He added, "Airtel money, the mobile wallet will remain and be different from savings account. Customers have an option to upgrade from Airtel money to bank."