Soon you could walk into a recharge store and come out with an insurance policy (and later even mutual fund scheme)!
Telecom giant Airtel Group, which has recently received payments banking license from RBI, is likely to sell third party products to increase its revenue.
It will begin with the distribution of insurance policies and credit cards and take up mutual funds later.
In fact, Shashi Arora, MD&CEO, Airtel Payments Banks is quoted in a news report that they are mulling over the possibility of selling distribution of insurance policies within a year. Further, he is reported to have said that offering mutual funds is tough for any payments bank but he is open to distribute it once they establish their business.
The company will leverage its existing network of over 2.50 lakh Airtel retail stores and recharge outlets to sell these products. It aims to expand its network to six lakh outlets with an investment Rs.3, 000 crore in the coming years.
We spoke to a few industry experts to understand how the move will affect the personal finance industry.
“Post demonetization, people especially in small cities and town are more receptive to financial products. Robust distribution network will enable a faster adoption of financial products. It will be interesting to see how payment bank spread financial awareness among people,” said Radhika Gupta, CEO Edelweiss AMC.
Pradeep Kumar CEO Union Mutual fund says that the move will help spread financial literacy among rural population. “In my view, payments bank will cater to the personal finance needs of rural populations. People can go to recharge outlets and open their savings accounts easily. These banks will have customer data, which they can utilize to cross sell third party products.”