Airtel Payments Bank, the payment banking unit of Indian telecom group Bharti Airtel, has launched pilot services across Karnataka, India.

In Karnataka, the bank’s services will be trialled across 12,000 Airtel retail outlets, which also serve as banking points. Majority of these outlets are located in rural areas.

The payments bank first launched pilot services in Rajasthan last month, followed by Andhra Pradesh and Telangana.

In August 2015, the Reserve Bank of India (RBI) gave in-principle approval to 11 entities for setting up payment banks.

The recipients were Airtel M Commerce Services, Aditya Birla Nuvo, Reliance Industries, Vodafone m-pesa, Tech Mahindra, Cholamandalam Distribution Services, Department of Posts, Fino PayTech, National Securities Depository, Shri Dilip Shantilal Shanghvi, and Shri Vijay Shekhar Sharma.

Payment banks are allowed to take deposits, offer internet banking, enable money transfers and sell insurance and mutual funds. They are also allowed to issue ATM/debit cards, though not credit cards and will be barred from lending to customers.