New Delhi: The government has allocated Rs500 crore to India Post Payments Bank for the financial year 2017-18 as it gears up to set up 650 branches across country by September 2017.
The government has allocated Rs125 crore as “capital infusion into corporate entity for India Post Payments Bank” and Rs375 crore as “grant in aid to India Post Payments Bank (IPPB)”, as per Output-Outcome Framework for Schemes 2017-18 for the department of posts (DoP) released on Monday.
India Posts is the second entity to roll out payments bank—though on a pilot basis—in Raipur and Ranchi, after Airtel that has earmarked Rs3,000 crore as initial investment for pan-India operations with an interest rate of 7.25% on deposits. Besides, Airtel is offering free money transfer from Airtel to Airtel numbers within Airtel Bank, money transfer to any bank account in the country.
The IPPB will offer an interest rate of 4.5% on deposits up to Rs25,000; 5% on deposits of Rs25,000-50,000 and 5.5% on Rs50,000-1,00,000. The total paid up equity of the new bank IPPB is Rs 800 crore, of which the government has already infused Rs275 crore.
Payments banks can accept deposits up to Rs1 lakh per account from individuals and small businesses. The new model of banking allows mobile firms, super market chains and others to cater to banking requirements of individuals and small businesses. The allocation to IPPB is part of Rs1,034.13 crore earmarked for the department of posts. The second big chunk of the total allocation, Rs279.6 crore, has been allocated for providing IT hardware and software in identified rural areas for improved access to services and customer satisfaction, resulting in increase in customer transactions, traffic and revenue.
The DoP has been allocated Rs110.83 crore for establishing e-commerce, parcel booking, international business centres, Rs73.5 crore for estates management, Rs32 crore for mail operations and Rs17.7 crore for equipments and IT infrastructure in rural post offices. The government has allocated Rs3.8 crore for setting up 246 offices and 200 outlets for providing better access to communication and financial services.