Photo: Bloomberg.
Photo: Bloomberg.

India Post Payments Bank launched: 10 things to know

The government aims to link all the 1.55 lakh post offices to the India Post Payments Bank system by 31 December, 2018

New Delhi: Prime Minister Narendra Modi launched India Post Payments Bank (IPPB) at Talkatora Stadium in New Delhi on Saturday. India Post Payments Bank will focus on providing banking and financial services to people in rural areas, by leveraging the reach of 1.55 lakh post office branches. “On the day of the launch, IPPB will have 650 branches and 3,250 access points spread across the country," the government said in a statement. The government aims to link all the 1.55 lakh post offices to the India Post Payments Bank system by 31 December, 2018.

10 things to know about India Post Payments Bank

1) India Post Payments Bank has been set up under the Department of Posts, Ministry of Communication, with 100% equity owned by Government of India.

2) It started operations on 30 January, 2017, by opening two pilot branches, one at Raipur and the other at Ranchi.

3) India Post Payments Bank will offer 4 per cent interest rate on savings accounts.

4) Payments banks can accept deposits of up to 1 lakh per account from individuals and small businesses, but do not have the mandate to extend loans.

5) But India Post Payments Bank will, in alliance with other financial service providers, offer third-party products. For example, in case of loans, India Post Payments Bank will work as an agent of PNB.

6) India Post Payments Bank will offer a range of products such as savings and current accounts, money transfer, direct benefit transfers, bill and utility payments, and enterprise and merchant payments.

7) These products, and services, will be offered across multiple channels (counter services, micro-ATM, mobile banking app, SMS and IVR), using the India Post Payments Bank’s technology platform.

8) India Post Payments Bank has been allowed to link around 17 crore postal savings bank (PSB) accounts with its accounts.

9) India Post Payments Bank “has been envisioned as an accessible, affordable and trusted bank for the common man," the government said in statement. It will leverage the vast network of the Department of Posts, which covers every corner of the country with more than 300,000 postmen and grameen dak sewaks.

10) The Cabinet earlier this week approved an 80% increase in spending for India Post Payments Bank (IPPB) to 1,435 crore. The increase will take the IPPB project outlay to 1,435 crore from 800 crore -- giving it additional firepower to compete in the market with existing operators like Airtel Payments Bank and Paytm Payments Bank.

(With agency inputs.)

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