Bharti Airtel, the country’s largest operator, took a headstart over rivals by going live with a pilot of its mobile banking service in Rajasthan.

Payments banks are a high profile attempt to improve financial inclusion among rural users and small business. Rival banks are due to be launched by Vodafone, Idea Cellular, as well as specialist mobile payments firms, including Paytm.

Airtel Payments Bank will start with 10,000 banking outlets at Airtel shops. In addition, it claims a wide range of merchants will accept payments from its customers from day one. It is targeting 100,000 merchants by the end of the year.

The bank is offering an interest rate of 7.25 per cent on savings accounts, the highest in India, as it seeks to kickstart take up.

The pilot is intended to test systems and processes ahead of a nationwide launch of the bank.

Customers can check their account balances and access other services using the Airtel Money app on smartphones, or through the USSD channel or IVR on feature phones.