PM Narendra Modi launches India Post Payments Bank for doorstep banking services

To offer banking services to the doorstep of every citizen, Prime Minister Narendra Modi has launched India Post Payments Bank (IPPB).

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To offer banking services to the doorstep of every citizen, Prime Minister has launched (IPPB). About three lakh postmen also known as ‘Grameen Dak Sewaks’ will deliver financial services across the country with the help of digital technology, said the government.

Department of Post informed that India Post Payments Bank will function through 650 branches and 3,250 access points immediately and by December 2018, it will be scaled to all 1.55 lakh post offices. The government asserted that India Post Payments Bank will be like any other bank but with a smaller scale of operations and without involving any credit risk.

As per the laid-down guidelines by Reserve Bank of India for payments banks, the India Post Payments Bank will accept deposits of up to Rs 1 lakh, offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third-party fund transfers. However, it can’t offer loans directly or issue credit cards.

Launching the service, Prime Minister Narendra Modi said with e-mails taking over inland letters, many thought technologies had threatened the existence of the postal department and that postmen would lose their livelihood. “(The growing pace of) technology (in communication) threw a challenge. We used technology as a base to turn that challenge into an opportunity,” he added.

India Post Payments Bank will leverage tech platforms. It will use Aadhaar to open accounts, while a QR card and biometrics will drive authentication, transactions, and payments. Grameen Dak Sewaks will be armed with smartphones and biometric devices to handle transactions.

Communications Minister Manoj Sinha said deposits in any account that exceed Rs 1 lakh will be automatically converted into post office savings account. IPPB has permission to link around 17-crore postal savings bank (PSB) accounts with its own setup.

India Post Payments Bank will leverage tech platforms. (Photo: PIB)
India Post Payments Bank will leverage tech platforms. (Photo: PIB)

Sinha said there are about 1.4 lakh bank branches and nearly 50,000 of them are in villages, which face a challenge in reaching the unbanked.

“IPPB will transform that. To the 1.4 lakh bank branches, 1.55 lakh branches will be added now with this launch,” he added. Sinha said that with the postal payments bank, people will be able to open an account in a minute with Aadhaar and biometrics.

The government-backed India Post Payments Bank will compete with Airtel Payments Bank and Paytm Payments Bank. India Post Payments Bank will offer products and services through multiple channels such as counter services, micro ATMs, mobile banking app, messages and interactive voice response.

It will offer a 4 percent interest rate on savings accounts. India Post Payments Bank has teamed up with financial services providers like PNB and Bajaj Allianz Life Insurance for third-party products like loans and insurance, respectively.

Of the 1.55 lakh post offices, about 1.30 lakh are located in rural areas. India Post Payments Bank is keen on tapping this network for expanding its efforts of financial inclusion and providing banking services to hitherto untapped market.

IPPB will also facilitate digital transactions and help deliver the benefits of schemes such as Pradhan Mantri Fasal Bima Yojana, which provides assistance to farmers.

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