The India Post Payment Bank
Prime Minister Narendra Modi on Saturday, September 1, 2018, launched a payments bank of the Department of Posts that will take banking to the doorstep of every citizen through an unmatched network of post offices and almost 3 lakh postmen and ‘Grameen Dak Sewaks’.
The India Post Payments Bank (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.
The 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.
Communications Minister Manoj Sinha said the IPPB would be available through 650 branches and 3,250 access points. Deposits in any account that exceed 1 lakh would be automatically converted into post office savings account.
The government owns 100 per cent in the IPPB, which will offer products and services though multiple channels such as counter services, micro ATMs, mobile banking app, messages and interactive voice response.
Tech platforms to handle transactions
The 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.
It will offer 4 per cent interest rate on savings accounts. The IPPB has teamed up with financial services providers like the PNB and Bajaj Allianz Life Insurance for third-party products like loans and insurance.
The Cabinet, earlier this week, approved an 80 per cent 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.
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. The IPPB also has permission to link around 17-crore postal savings bank (PSB) accounts with its own set-up.
In 2006, it was announced that India Post would open a bank to erase its 1,000 crore deficit during the 11th Five Year Plan, emulating Poste italiane. In February 2013, it was announced that India Post had hired Ernst and Young to prepare a report on the proposed bank. Some officials of the Ministry of Finance had opposed the plan saying that India Post did not have the expertise to provide banking services such as handling credit.
https://www.ippbonline.com/
In August 2013, the Planning Commission of India said that even though it supported the plan, it was not feasible owing to financial difficulties at the moment. It also felt that converting post offices into bank branches may hamper their original function. In October 2013, the Cabinet of India rejected the proposal on the grounds that India Post did not have sufficient expertise in running a bank. In December 2013, India Post announced that it would install ATMs in 1000 of its office across India in the first half of 2014.
On 27 February 2014, India Post opened its first ATM in Chennai. In April 2014, the Reserve Bank of India (RBI) gave in-principle banking licences to IDFC and Bandhan Financial Services out of 26 applicants, but India Post was not considered for a licence because it had not received the mandatory clearance from the government. However, the RBI said that it would examine the proposal separately in consultation with the government.
In August 2013, the Planning Commission of India said that even though it supported the plan, it was not feasible owing to financial difficulties at the moment. It also felt that converting post offices into bank branches may hamper their original function. In October 2013, the Cabinet of India rejected the proposal on the grounds that India Post did not have sufficient expertise in running a bank. In December 2013, India Post announced that it would install ATMs in 1000 of its office across India in the first half of 2014.
On 27 February 2014, India Post opened its first ATM in Chennai. In April 2014, the Reserve Bank of India (RBI) gave in-principle banking licences to IDFC and Bandhan Financial Services out of 26 applicants, but India Post was not considered for a licence because it had not received the mandatory clearance from the government. However, the RBI said that it would examine the proposal separately in consultation with the government.
https://www.ippbonline.com/
In September 2014, a task force was formed by Prime Minister Narendra Modi which aimed to study ways in which the existing postal network could be leveraged. The task force was headed by T. S. R. Subramanian. On 4 December 2014, the task force submitted its report to Minister for Communications and Information Technology Ravi Shankar Prasad. The report said that more services should be provided in the field of banking, insurance and e-commerce.
In late December 2014, it was announced that India Post would issue ATM-cum-debit cards to its Post Office Savings Bank (POSB) account holders. In January 2015, it was announced that the Indian government was considering a legislature, to finalise the setting up of the bank, following which a banking license would be applied for at the Reserve Bank of India. On 28 February 2015, during the presentation of the Budget, it was announced that India Post will use its large network to run a payments bank.
In September 2014, a task force was formed by Prime Minister Narendra Modi which aimed to study ways in which the existing postal network could be leveraged. The task force was headed by T. S. R. Subramanian. On 4 December 2014, the task force submitted its report to Minister for Communications and Information Technology Ravi Shankar Prasad. The report said that more services should be provided in the field of banking, insurance and e-commerce.
In late December 2014, it was announced that India Post would issue ATM-cum-debit cards to its Post Office Savings Bank (POSB) account holders. In January 2015, it was announced that the Indian government was considering a legislature, to finalise the setting up of the bank, following which a banking license would be applied for at the Reserve Bank of India. On 28 February 2015, during the presentation of the Budget, it was announced that India Post will use its large network to run a payments bank.
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