The Indian Government is working on setting up 650 India Post Payments Bank and gearing up to facilitate financial inclusion through all of 155K post offices, as per Minister for Communications Manoj Sinha.
Speaking here on the occasion of World Post Day, he stated, “For India Post Payments Bank, we will be opening nearly 650 branches across India. Two, namely in Raipur and Ranchi, have already started. The aim is that through 650 post payments bank, we can push financial inclusion in 155K villages.”
However, as per media reports, the India Post Payments Bank (IPPB) was to open these 650 branches by September which seems to have been delayed on account of its failure to get a system integrator (SI) on board on time, thus upsetting its payments bank schedule. Only recently, India Post awarded the system integrator contract to US tech giant HP.
In January this year, India Post received a final license from the Central Bank in order to kick start its payment bank operations. In February this year, it was reportedly granted $74 Mn (INR 500 Cr) in the latest Union Budget 2017-18. The allocation was made keeping in mind India Post’s aim to open 650 new branches for the payments bank.
It was in February 2016 that the Public Investment Board (PIB) approved India Post’s $116.7 Mn (INR 800 Cr) proposal for setting up a payments bank. According to the government’s proposed plan, each post office in the country will offer post bank services. As per media reports, the Payments bank under India Post offers an interest rate of 4.5 % on deposits up to INR 25,000; 5 % on deposits of INR 25,000-INR 50,000; and 5.5 % on INR 50,000-INR 1,00,000.
Besides India Post, other payments banks that have become operational this year with the aim of pushing financial inclusion include Airtel Payments Bank, Paytm Payments bank, and Fino Payments Bank. Airtel which beat Paytm to open the first payments bank, began operations in 29 states and currently offers the highest interest rate of 7.25 % p.a. on deposits in savings accounts. Paytm debuted its Payments bank in May, is the first bank to offer cashback on deposits and is also planning to open 31 branches and 3,000 customer service points in a year. It also recently reported losses of $4.6 Mn. Fino Payments Bank went live with 410 branches and over 25,000 touch-points on day one itself in the month of July.