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India Postal Payments Bank to Facilitate Financial Inclusion

India Postal Payments Bank (IPPB), a major initiative towards financial inclusion, a big outreach to provide ‘door-step banking’ to the poor through an unmatched network of over 1.5 lakh post offices and almost 3 lakh postmen and ‘Grameen Dak Sewaks’ who are connected to the people of the country, was launched by Prime Minister, Narendra Modi on Saturday September 1, 2018 at Talkatora Stadium and witnessed at over 3000 locations across the country connected to the main event in New Delhi. The banking services through IPPB branches opened across 650 districts will conveniently reach the remotest places in the country, and the people living there.

  • IPPB, 100% owned by the Government, was incorporated as a public sector company under the Department of Posts, Govt. of India on 17 August 2016.
  • IPPB started operations on 30 January 2017 with two experimental branches, one at Raipur in Chhattisgarh and the other at Ranchi in Jharkhand.
  • IPPB, will accept deposits of up to ₹1 lakh, offer remittance services, mobile payments, purchases, third-party fund transfers, transfer of government benefits, bill payments and other services such as investment and insurance, besides ATM debit card and net banking.
  • IPPB will offer 4% interest rate on Savings Accounts.
  • Deposits in any account that exceed ₹1 lakh would be automatically converted into Post Office Savings Account.
  • IPPB services will be available at 650 branches and 3,250 access points from September 1, but will be quickly scaled to all 1.55 lakh post offices by December. Of these, 1.30 lakh access points will be located in rural areas, taking it to a vast untapped market.
  • IPPB also has permission to link around 17 crore Postal Savings Bank (PSB) accounts with its own set-up.
  • IPPB 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 shall be empowered with smartphones and digital devices to provide financial services.
  • IPPB will also facilitate digital transactions, and help deliver the benefits of schemes such as Pradhan Mantri Fasal Bima Yojana, which provide assistance to farmers.
  • IPPB will be like any other banks but its operations will be on a smaller scale without involving any credit risk. It will carry out most banking operations like accepting deposits but won’t advance loans or issue credit cards.
  • IPPB has teamed up with financial services providers like the PNB and Bajaj Allianz Life Insurance for third-party products like loans and insurance.
  • Union Cabinet recently approved an 80% hike in spending on the IPPB to ₹1,435 crore, arming it with additional ammo to compete in the market with existing operators like Airtel Payments Bank and Paytm Payments Bank.

Prime Minister said that the postman has long been a respected and accepted person in the villages. He said the trust on the postman remains, despite the advent of modern technology. He said that the Government’s approach is to reform existing frameworks and structures, and hence, transform them in accordance with the changing times.

 

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