India Post Payments Bank (IPPB) will be like any other bank 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 can’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 such as ATM/debit cards, net banking and third-party fund transfers.
Communications minister Manoj Sinha said IPPB will be available through 650 branches and 3,250 access points. Deposits in any account that exceed Rs 1 lakh will be automatically converted into post office savings account, he said.
The government owns 100 per cent 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.
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. IPPB has teamed up with financial services providers such as 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 IPPB to Rs 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 today but will be quickly scaled to all 1.55 lakh post offices by December 2018. Of these, 1.30 lakh access points will be located in rural areas, taking it to vast untapped market. IPPB also has permission to link around 17-crore postal savings bank (PSB) accounts with its own set up
About India Post Payments Bank
1) India Post Payments Bank has been set up under the Department of Posts, Ministry of Communication, with 100% equity owned by Government of India.
2) It started operations on 30 January, 2017, by opening two pilot branches, one at Raipur and the other at Ranchi.
3) India Post Payments Bank will offer 4 per cent interest rate on savings accounts.
4) Payments banks can accept deposits of up to Rs 1 lakh per account from individuals and small businesses, but do not have the mandate to extend loans.
5) But India Post Payments Bank will, in alliance with other financial service providers, offer third-party products. For example, in case of loans, India Post Payments Bank will work as an agent of PNB.
6) India Post Payments Bank will offer a range of products such as savings and current accounts, money transfer, direct benefit transfers, bill and utility payments, and enterprise and merchant payments.
7) These products, and services, will be offered across multiple channels (counter services, micro-ATM, mobile banking app, SMS and IVR), using the India Post Payments Bank’s technology platform.
8) India Post Payments Bank has been allowed to link around 17 crore postal savings bank (PSB) accounts with its accounts.
9) India Post Payments Bank “has been envisioned as an accessible, affordable and trusted bank for the common man,” the government said in statement. It will leverage the vast network of the Department of Posts, which covers every corner of the country with more than 300,000 postmen and grameen dak sewaks.
10) The Cabinet earlier this week approved an 80% increase in spending for India Post Payments Bank (IPPB) to Rs 1,435 crore. The increase will take the IPPB project outlay to Rs 1,435 crore from Rs 800 crore -- giving it additional firepower to compete in the market with existing operators like Airtel Payments Bank and Paytm Payments Bank
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