Airtel To Offer Financial Products
Airtel is diversifying its portfolio of products and services for customers around India. The company is now offering financial products. It is also going to sell insurance and mutual funds in the near future.
The company will be looking in the coming year to find various financial products from third parties. These would be sold to the public with tie-ups for mutual funds and insurance in the future. The goal is to create a more diverse array of products for sale.
This move makes it easier for Airtel to offer such services. Third parties have to help with managing financial products. This is due to the current standing that Airtel holds in terms of its operation. The move will help add to the functions that Airtel offers to people.
A Vast Target
Airtel Payments Bank will sell financial services to people throughout India. The bank will target its 20 lakh savings accounts. It will also target people in many parts of India through nearly 2,50,000 banking sites.
Competing With Others
Airtel is offering financial products as other competitors are starting to do the same. For instance, Freecharge sells mutual funds and insurance policies through its mobile wallet service. Snapdeal also has loans for customers with options that do not entail any collateral.
Whether the entities Airtel will work with are competing with others is unclear at this point. These entities include the ones that will provide Airtel with the financial instruments available for sale. Such instruments are designed to be efficient and easy to support but the terms associated for handling them will clearly vary based on what is open at a certain time.
How Airtel Will Work
Airtel has come up with a few solutions for getting its financial products ready. This is to help with making more money and to keep the process as simple and easy to follow as possible:
- Airtel will work with third party vendors to get its loans and insurance products. This comes through cross-selling due to Airtel not being legally allowed to directly offer financial services.
- The company will continue to make money through fees on withdrawals and interest on investments. This comes as about 75 percent of deposits have to be added into SLR securities. Meanwhile, charges are levied on withdrawals but other transactions will continue to not have those charges added to them.
- Third party mutual funds are being reviewed based on the investments utilized in each of those funds. The goal is to help with identifying the individual investment needs that such parties have in order to make money and get the most out of investments at large.
E-Wallet Payments May Be Reviewed
Airtel may also be impacted by new moves to get e-wallet transactions managed and analyzed. The government is establishing a series of new regulations to manage e-wallet transactions. This is to ensure that payments that are stuck in some manner are reviewed carefully. The end user may have an option to manage payments that are stuck but new regulations will help to create rules as to how such payments may work.
This could make a difference for Airtel as the company aims to get more products and services out. By working with new payment standards, it may be easier for payments to be handled right. This will improve how Airtel and other similar entities can get the money that they are looking for.
What About the Interest Rate?
At this moment, Airtel uses an interest rate of 7.25 percent. This is offered per year on all deposits. The CEO and MD of Airtel states that the 7.25 percent rate was used simply to get more customers to be interested in services. This remains one of the better rates on the market in terms of deposits and how people can earn more without spending as much on what they are finding.
Whether this rate will change is uncertain at the point. There is always the chance that it may remain due to the added revenues that can come in from selling financial instruments. The possibility of this is great considering how many people have become loyal customers of Airtel thanks to this deal. Still, there are concerns over how Airtel might try and charge more money for services in the event that the financial solutions don’t sell well or the cost for getting them ready starts to increase.
The plans that are being used by Airtel are working with the intention of making it easier for businesses to grow and thrive. If used right, it should be easier for people to use Airtel for an added variety of services including any financial options. The potential boost in income will especially be critical for the development of the site.