India Post Payments Bank - RSTV: IPPB In Depth

Participants:

Anchor: Teena Jha

Importance of this Episode:

• On September 1, 2018, Prime Minister Narendra Modi launched the ‘India Post Payments Bank’ – an ambitious initiative aimed at making banking services available at every Indian’s doorstep.
• This payments bank of the Indian postal department, will work through its huge network of post offices and nearly 3 lakh postmen and ‘Grameen Dak Sewaks’.
• The new payments bank will offer a range of products such as savings and current accounts, money transfer, direct benefit transfers, bill and utility payments, and also enterprise and merchant payments.
• These products and services will be offered through multiple channels like counter services, micro-ATM, mobile banking app and SMS, using the bank’s state-of-art technology platform.
• Further, by December 2018, all 1,55,000 post offices will be used as axis points to provide banking services. Prime Minister Narendra Modi says that the India Post Payments Bank (IPPB) will bring about a huge change in the country’s economic as well as social situation by reaching every nook and corner of the country.
• In this article, we take a look at what is a payments bank? How is the India Post Payments Bank different from other such entities?  What are the services that it offers? And how does it aim to revolutionise banking and digital payments in India?

Analysis by the Experts:

• The India Post Payments Bank (IPPB) is a service that enlists the might of the country’s postal department in expanding financial inclusion to the masses. As of now, it is available through 650 branches and 3250 access points. The Government owns 100% in IPPB which has been setup under the aegis of the Department of Posts, and will offer products and services through multiple channels such as counter services, micro ATM’s, mobile banking App, messages and interactive voice response.

• The India Post Payments Bank (IPPB) launched by PM Modi aims to make banking more accessible to the citizens of the country. Through the vast network of post offices, its objective is to bring the rural population into the country’s financial system.

• At present it has 650 branches and 3250 access points across the country. By the 31st of December this year (2018), all of India’s 1,55,000 post offices will be linked to the IPPB system. Of these, 1,30,000 access points will be located in rural areas, taking it to a vast, untapped market.

• IPPB also has the provision to link it with over 17 crore postal savings bank accounts with its own setup.

• As part of the initiative, around 3 lakh postmen and ‘Grameen Dak Sewaks’ will offer services and financial guidance to customers in places where banking facilities are not available.

• The postal department has a rural penetration of 1,30,000 post offices. This is almost 2.5 times higher than the number of banks in these areas.

• IPPB has also partnered with different financial organizations to provide loans, investments and insurance products. It will leverage the infrastructure of the Reserve Bank of India, National Payments Corporation of India and will use the Aadhar for signing up new users, thereby reducing extraneous cost.

The India Post Payments Bank has been incorporated as a Public Sector Company under the Department of Posts with 100% Government equity and is governed by the Reserve Bank of India.

Before the launch, the Union Cabinet approved an 80% hike in spending on IPPB to 1435 crore rupees. Arming it to compete in the market with existing operators like Airtel Payments Bank and Paytm Payments Bank. The increase is meant to cover costs relating to technology and manpower.  

Leveraging the vast network of post offices throughout the country, the government’s intention is to make banking facilities available at the doorstep of every Indian citizen with the help of a workforce of 3,00,000 postmen. With your local postman carrying a handheld device, that can capture a QR code, a biometric proof of ID, people can expect to withdraw cash from the comfort of their homes. After opening an account at the nearest post office, using their Aadhar card.

For detailed information on India Post Payments Bank services, Features, Opportunities, and Challenges, check the article linked here.

Mains Questions:

1. Examine the role which the India Post Payments Bank (IPPB) can play in furthering the idea of financial inclusion. (250 Words, 12.5 marks)
2. The India Post Payments Bank (IPPB) can play a critical role in furthering the idea of financial inclusion. Critically Analyse. (250 Words, 12.5 marks)
3. For the success of the India Post Payments Bank (IPPB), rural infrastructure has to be strengthened.  Examine. (250 Words, 12.5 marks)

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