Airtel Will Sell Mutual Funds, Insurance Via Payments Bank; Gov. Drafting Rules To Make E-Wallets Safer
Airtel Payments Bank has decided to jump into the lucrative financial products niche and will be soon selling mutual funds and insurance policies.
As of now, Airtel Payments Bank has 2,50,000 banking points across India and close to 20 lakh saving accounts, which would be used for selling financial products.
Shashi Arora, MD and CEO, Airtel Payments Bank said, “Over the next one year we will explore chances of having third party products. We will explore tie-ups for insurance, mutual funds and loans at some stage.”
Earlier, Freecharge had also started selling financial products like mutual funds, insurance via their mobile wallets; and Snapdeal is already lending collateral free loans to sellers.
Airtel’s Game Plan for Selling Financial Products
Note here, that as per RBI’s guidelines for payments bank, they are not supposed to offer loans to their customers. This is the reason Airtel Payments Bank has decided to cross-sell insurance products from third party vendors, just like existing banks are doing. And it makes sense as well.
Shashi said, “We plan to sell insurance and MF products through our network in near future. After that, we will also offer loan products of other entities like NBFCs as we are not allowed to do lending directly”,
As of now, Airtel Payments Bank is earning profits from interest in investments and fees on cash withdrawals, made via savings account. However, since Payments Banks are now required to park 75% of the deposits in SLR securities (Statutory liquidity ratio), which is a Govt. requirement for all commercial banks, and 25% deposits must be invested in RBI approved instruments, Airtel is now seeking additional income via third party financial products.
E-Wallets Would Be Regulated For More Safety
As of now, there exist no rules for monitoring payments made via e-wallets. If any payment is stuck in between, the end-user has the only option to approach that e-wallet.
Soon, this will change, as Govt. is right now forming regulations which will govern all e-wallet transactions.
An unnamed high ranking official from the Finance Ministry said, “The IT Ministry is working on a legal framework that will define the liabilities and obligations of payment companies. This will establish the rights and liabilities of the customers as well as the e-wallet companies,”
As per him, the regulations would be put across to the public domain within a month for an open consultation.
These new regulations would be created and enforced by the Electronics, Information and Technology Ministry, and will cover all e-wallets operating in the country such as Paytm, Freecharge and Mobikwik.
We will keep you updated as more details come in..