India’s payments bank industry touches nearly 20 crore user base each month, of which about 40-50 per cent of users lack access to formal credit, and allowing payments banks to lend could significantly boost formal credit and financial inclusion in the country, Airtel Payments Bank MD Anubrata Biswas told businessline.

“Payments bank by its definition are built on technology, innovation and resolution. Allowing small amount of lending can allow payments banks to be very innovative and bring a large number of Indians to formal credit,” he said, adding that initially the regulator can consider allowing payments banks to extend small ticket loans amounting to Rs 2 lakh-Rs 5 lakh. Currently, payments banks are not allowed to engage in lending business and also not accept deposit of more than Rs 2 lakh per customer.

Airtel Payments Bank has over 5 lakh banking touch points across country.

Business growth

Biswas said Airtel Payments Bank is seeing continued growth across urban digital, rural and B2B businesses, largely due to growing change in consumers in terms of needing a second account and also benefiting from investment made in last 1.5 years on technology.

“We see continued momentum across urban digital, rural and B2B businesses...GMV we are seeing very solid growth again,” he said.

The payments bank’s revenue grew 52 per cent year-on-year (YoY) during Q1FY25 to ₹610 crore. During the quarter, the payment bank’s monthly transacting users exceeded 88 million, giving a boost to customer deposits, which grew by 53 per cent on year to ₹2,943 crore.The payments bank expects sustain growth in top line and deposits in FY25.

Separately, the payments bank recently launched NCMC (National Common Mobility Card)-enabled Smartwatch, integrated with the RuPay chip.

The smartwatch, conceptualized by Noise, enables NCMC-enabled Tap and Pay transactions and is likely to be a growth driver for the payments bank going ahead. “Urban mobility is the next big thing in transit where NCMC and NCMC protocols will become a very important factor in driving digital mobility for urban Indians,” Biswas said.

The payments bank has also launched a section on its mobile app wherein consumers can detect what are the hidden charges being levied for various services, for what purpose is their data being used, and which applications are taking such permission from customers.

“One thing we found was urban customers find banks very opaque, non-transparent, it is tough to understand terms and conditions, what charges are being applied, where is the data being stored,” he said. The payments bank also launched a fraud alert feature in the app wherein if a customer detects a fraud, she can report and block her account and ask the payment bank to conduct an investigation.

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