Prime Minister launches India Post Payments Bank

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Prime Minister Narendra Modi on Saturday launched India Post Payments Bank (IPPB), which is aimed at strengthening financial inclusion by taking banking services to the unbanked rural areas across the country. The IPPB, armed with almost three lakh postmen and ‘Grameen Dak Sewaks‘ with digital aids, hopes to deliver financial services at citizen’s doorstep.

IPPB – which will be available through 650 branches and 3,250 access points immediately, scaled to all 1.55 lakh post offices by December 2018 – is like any other bank but with smaller scale of operations and without involving any credit risk.

The freshly-minted 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.

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 will be armed with smartphones and biometric devices to handle transactions.

he government owns 100 percent in IPPB, which has been set up under the aegis of the Department of Posts, and will offer products and services through multiple channels such as counter services, micro ATMs, mobile banking app, messages and interactive voice response.

Communications minister Manoj Sinha said that 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 set up. Sinha also said that there are about 1.4 lakh bank branches and nearly 50,000 of them are in villages, which face a challenge in reaching the un-banked.

“IPPB will transform that. To the 1.4 lakh bank branches, 1.55 lakh branches will be added now with this launch,” he added. IPPB 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 4 percent interest rate on savings accounts. IPPB has also 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. IPPB 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 provide assistance to farmers.

While launching the IPPB on Saturday, Modi had said that farmers and daily wage earners under the Pradhan Mantri Fasal Beema Yojana and Mahatma Gandhi National Rural Employment Guarantee scheme would be among the key beneficiaries as they can receive their claims through the payments bank.

 He also said the postman is all set to don a new avatar, where he would provide banking services as well as promote digital literacy to the remotest parts of the country.

India Post has termed the IPPB as “India’s most accessible bank” and said in a tweet that the primary beneficiaries of IPPB include senior citizens, students, homemakers, urban migrants, farmers, DBT beneficiaries, rural influencers, kirana stores and small businesses.

Several branches of the payments bank were opened on Saturday with Union ministers and BJP leaders lauding the move. Union minister Ravi Shankar Prasad said the operations of the India Post Payments Bank will strengthen the financial inclusion programme in India and make country’s “village systems” stronger.

At the inauguration of the Kolkata branch, he also said that when the IPPB starts operation, the revenue, accountability and credibility of postal department will skyrocket.

BJP president Amit Shah also said that the IPPB will bring the unbanked people in remote areas of the country to the banking mainstream and empower them economically. He described the development as one of the most innovative financial inclusion initiative in independent India.

nion home minister Rajnath Singh said that the IPPB will take banking services to the doorstep of every citizen through the network of post offices. “The IPPB will take banking to doorstep of every citizen through an unmatched network of post offices, postmen and Grameen Dak Sewaks,” he said launching the IPPB in Lucknow.

Inaugurating the Girgaum branch of the IPPB, Maharashtra chief minister Devendra Fadnavis said the opening of IPPB has started a new chapter in the history of country’s economic progress. He expressed confidence that the commencement of the IPPB would ensure the financial inclusion of people who were away from development.

IPPB will bring in a paradigm shift in extending banking services to the people of Odisha, Union minister Dharmendra Pradhan said, while launching the IPPB banking services at the Chief Post Master General (CPMG) office in Bhubaneswar.

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