Govt Expects India Post Payments Bank To Be Profitable After Two Years, Launches Tomorrow

Govt Expects India Post Payments Bank To Be Profitable After Two Years, Launches Tomorrow

SUMMARY

IPPB will have at least one branch in every district of India

The move is aimed at leveraging the reach of India Post to provide banking service to people in rural areas

We are directly recruiting 3,500 people and pushing the financial literacy programme in a big way, says Sinha

Telecommunications minister Manoj Sinha expects India Post Payments Bank (IPPB) to be profitable after two years. IPPB will start its operation with the launch 650 branches across the country on September 1 (Saturday).

“This will happen because postal workers will be motivated by the commissions offered to them. This motivates workers, which is generally not the case in the government sector,” Sinha told ET in an interview.

The government has decided to give 30% commission on earnings. Of which, 25% will go directly to postmen or Grameen Dak Sevaks (GDS), and 5% to the department of post. IPPB has already opened 4 lakh accounts, so far.

“We are directly recruiting 3,500 people and pushing the financial literacy programme in a big way. We require more people. We have trained 18,000 postmen and GDSes,” Sinha said.

IPPB will have at least one branch in every district of India. The move is aimed at leveraging the reach of India Post, that has 1.55 lakh branches across the country, to provide banking and financial service to people in far-flung areas. Ahead of the national launch, a special drive was conducted in the Central Indian region to enroll new customers for IPPB.

IPPB became the fifth such entity — after Airtel Payments Bank, Aditya Birla Idea Payments Bank, Fino Payments Bank, and Paytm Payments Bank — to start operations after the Reserve Bank of India (RBI) gave its in-principle approval.

Sinha said that IPPB has no competition with the private banks due to its wide reach in the remotest parts of the country. He said IPPB is present in 130,000 villages. There are about 649,481 villages in India, according to 2011 census data.

The unique selling point (USP) of IPPB is doorstep banking which would be operational through three lakh postmen (the last mile service partners of IPPB ), along with providing Direct Benefit Transfer to customers.

“People don’t need to hold on to cash and can use a QR card. You don’t have to remember your pin number. You don’t have to remember your account number. And this will be the lowest cost account opening system because of Aadhaar. Within minutes your account will be open and transactions will happen within fractions of minutes,” Sinha said.

According to the minister, IPPB’s target customers are senior citizens, students, homemakers, urban migrants, farmer, direct benefit transfer (DBT) beneficiaries, rural influencers, kirana stores and small businesses.IPPB                                                   Photo Credit: IPPB

In the IPPB accounts, the balance on reaching the maximum threshold of $1.4K (INR 1 lakh) would be transferred to the linked Post Office Savings Account (POSA).

“According to the licence conditions with the RBI, we have a deposit limit of maximum INR 1 lakh for savings accounts. But in our case, we have the advantage of existing postal savings accounts. We will link these (IPPB) accounts to postal savings accounts,” the minister said.

“Helping government schemes reach the last man has been a key goal of our government. If IPPB can be a tool to help achieve this, then I will definitely be somewhat satisfied.” the telecommunication minister said.

[The development was reported by ET.]

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
UNLOCK 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
UNLOCK 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Govt Expects India Post Payments Bank To Be Profitable After Two Years, Launches Tomorrow-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Govt Expects India Post Payments Bank To Be Profitable After Two Years, Launches Tomorrow-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Govt Expects India Post Payments Bank To Be Profitable After Two Years, Launches Tomorrow-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Govt Expects India Post Payments Bank To Be Profitable After Two Years, Launches Tomorrow-Inc42 Media
Govt Expects India Post Payments Bank To Be Profitable After Two Years, Launches Tomorrow-Inc42 Media
You’re in Good company