The commendable performance of India Post Payments Bank (IPPB) has been attracting attention in the banking sector. On August 22, 2023, IPPB reported an operational profit of Rs 20.16 crore for the fiscal year 2022-23, marking its first-ever profit. Alongside, the bank also registered a significant growth of 66.12% in overall revenue, a true testament to their constant efforts towards sustainable financial inclusion and empowering citizens.
About India Post Payments Bank (IPPB)
India Post Payments Bank was launched on September 1, 2018, with the Government of India holding 100% equity. The first pilot branches were launched in Ranchi, Jharkhand and Raipur, Chhattisgarh. Utilising India’s extensive postal infrastructure of 1,55,000 post offices and 3,00,000 postal employees, IPPB is set on becoming an accessible, affordable, and trusted bank, available to all citizens of the country.
Grounded Principles and Innovative Approaches
The strategic approach of IPPB involves the core principles of the India Stack model. This includes striving for paperless, cashless, and presence-less banking. By incorporating biometrics-integrated smartphones and devices, IPPB manages to offer secure transactions. The bank is also dedicated to providing simple and budget-friendly banking solutions through user-friendly interfaces in 13 languages.
Boosting Financial Inclusion
IPPB plays an essential role in facilitating financial inclusion. It focuses on serving the unbanked and underbanked population, contributing to the vision of a cashless economy and a digital India. IPPB aims to provide equal opportunities for financial security and empowerment. Various initiatives have been taken by IPPB for empowering citizens, such as the ‘Niveshak Didi’ initiative for women beneficiaries and recognising the contributions of postmen and Gramin Dak Sevaks.
Services and Future Goals
IPPB offers services such as loan referral services, low-cost health & accidental products like Antyodaya Shramik Suraksha Yojana for Shramyogis registered on the e-Shram portal, and more. The bank aims to transform into a Universal Service platform, leveraging technology for expanded accessibility and reach. It maintains a focus on innovation to empower citizens and contribute to a digitally inclusive society.
Payments Bank: A Differentiated Banking License
Payments banks are part of the Reserve Bank of India’s strategy of providing differentiated banking licenses. Proposed by a committee headed by Dr. Nachiket Mor, these banks cater to lower-income groups and small businesses. Unlike conventional banks, payment banks can only accept demand deposits, i.e., savings and current accounts, but not time deposits. These banks are restricted to holding a maximum balance of Rs. 2,00,000 per individual customer. Also, they are not allowed to accept Non-Resident Indian (NRI) deposits nor set up subsidiaries to undertake non-banking financial services activities.
