Prime Minister Narendra Modi has launched India Post Payments Bank (IPPB) with 650 branches and 3250 access points, with the aim of reaching out to rural areas of India with digital banking facilities.
Modi expressed at the launch that the IPPB will bring banking to the doorstep of the “unbanked”, bridging the last major gap in financial inclusion.
“The India Post Payments Bank will further the process of financial inclusion which started with the launch of Jan Dhan Yojana launched in 2014,” The News Minute quoted the Prime Minister speaking at the launch.
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The number of rural branches in India right now is 49,000, which is expected to grow to over 1.75 lakhs. With this launch, individuals and small businesses can deposit up to INR 1 lakh per account in Payments banks. They can also transfer and receive money from any bank account as well as avail facilities like RTGS, NEFT, IMPS transactions at no cost at all. They can also maintain a minimum balance account without any charge.
“The Indian Postal Department has 1.5 lakh post offices and more than 3 lakh postmen. We have taken the onerous task of linking such an extensive system with technology to build the most powerful system. Now the postman is equipped with a smartphone and has a digital device in his bag,” Modi said.
IPPB has said that by December 31, all the 1.5 lakh post offices across India will be connected to IPPB. The numerous postmen in the Indian postal service will be furthering the cause of this move by bringing banking to rural India via hand-held devices, through which people can access their accounts. The postal department’s massive network is already present in far flung areas of the country.
IPPB has a range of products to offer to its customers, for instance savings and current accounts, money transfer, direct benefit transfers, bill and utility payments, and enterprise and merchant payments.
India post obtained the license to run payments bank from RBI on August 19, 2015. A year later, it was registered as a public limited government company to set up a payments bank. The first branch of IPPB was launched on 30 January 2017 at Raipur and Ranchi.
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IPPB is the fifth firm to go live with payments bank permit, after Airtel, Paytm Jio, and Fino. To up the competition against Airtel and Paytm payment banks, the Cabinet approved an 80% increase in expenditure for IPPB to INR 1,435 crore for this project.
Since 17.5 crore Postal Savings Bank (PSB) accounts will be linked to IPBP accounts, the scheme is likely to have an advantage over others. IPPB is also collaborating with Punjab National Bank to provide loans to farmers and poor people.
Recently, RBI has tightened regulations against payments banks with regards to KYC and data security. After an audit in June by RBI, Paytm Payments Bank has been asked to refrain from enrolling new customers. After ten months of monitoring, Airtel Bank has only been allowed to enroll new customers from July.
