On September 1, 2018, India Post Payments Bank (IPPB) was officially launched by the Prime Minister of India. The main objective of this initiative is to interlink all 1.55 lakh post office branches to IPPB services by the end of that year. Alongside this, an IPPB mobile app also made its debut, enabling the users to pay for a variety of services like phone recharges and bills, electricity bill, DTH service, and college fees etc. which are present on Bharat Bill Payments System of National Payments Corporation of India.
About India Post Payment Bank
The India Post Payment Bank (IPPB) is a public limited institution with 100% government ownership, under the Department of Posts. This stands as the first Public Sector Undertaking (PSU) under the same department.
Services provided by IPPB
Following the guidelines given by the Reserve Bank of India (RBI), IPPB will focus on offering essential financial services such as utility bill payments including all types of expenses, social security payments like NREGA wages, direct benefit transfer, person to person remittances both domestically and internationally, current and savings account up to a balance of Rs 1 lakh. Additionally, it will grant access to third-party services like insurance, mutual funds, pension products, and credit products, especially in rural areas and among the underprivileged segments of society through being a business correspondent to other banks.
Mobile Banking With IPPB
More than 3 lakh postmen and Grameen Dak Sevaks will function as mobile bankers, offering doorstep banking services known as “banking at your doorstep- Aapka Bank Aapke Dwar”, at a fee between Rs. 15-35 per transaction, and up to a maximum limit of Rs. 10,000 per transaction.
Savings Account Types
IPPB provides three sorts of savings accounts- regular, digital, and basic- at an interest rate of 4% per annum. All of these accounts are eligible for issuance of debit cards and ATM cards, which are applicable on ATM networks of all banks. However, a note of caution is that they do not issue credit cards or offer loans.
Benefits of IPPB
IPPB can act as a catalyst for social and financial inclusion due to the extensive network of post offices across the country. The extensive network, resources, and reach of the Department of Post enables it to provide low-cost, high-quality financial services to customers nationwide. Rural Banking through IPPB could potentially fill gaps in financial inclusion in the remotest areas of the nation.
Employment Generation
The launch of IPPB has created job opportunities for more than 3500 banking professionals, who will be engaged in propagating financial literacy across the country.
Payment Bank
A committee led by Dr. Nachiket Mor recommended the establishment of ‘Payment Banks’ to cater to lower income groups and small businesses. Payment banks are a differentiated form of banking, offering a limited range of products. They can only accept demand deposits, i.e., savings and current accounts, and not time deposits. They are restricted to holding a maximum balance of Rs. 100,000 per individual customer. Payment banks are not authorized to accept deposits from Non-Resident Indians (NRIs) nor can they set up subsidiaries to undertake non-banking financial services activities.
