PM Modi To Launch India Post Payments Bank To Take Financial Services To Rural Areas

On August 21, Prime Minister Narendra Modi will launch the India Post Payments Banks (IPPB), which will have at least one branch in every district of India, aimed at providing financial services in the remotest rural areas of the country.

Two IPPB branches are said to already be in operation, with 648 branches set to be launched across every district in the country.

IPPB CEO Suresh Shetty earlier said that the IPPB would go live with 650 branches in addition to 3,250 access points co-located at post offices. There will also be 11K postmen stationed both in rural and urban areas for providing doorstep services, he added.

The India Post Payments Banks is the third entity to receive a payments bank permit after Bharti Airtel and Paytm. It can accept deposits up to $1.45 K ( INR 1 lakh) per account from individuals and businesses. The bank has been given the permission to link more than 17 Cr postal savings bank (PSB) accounts with its account.

It also has the permission to offer real-time gross settlement (RTGS), National Electronic Funds Transfer (NEFT), Immediate Payments Service (IMPS) transactions, which will enable IPPB customers to transfer and receive money from any bank account. Further, the IPPB will be used by the government to distribute MGNREGA wages, subsidies, and pensions.

How Will The IPPB Work?

The IIPB will leverage the reach of India Post’s 1.55 lakh post office branches to provide banking and financial service to people in rural areas. The government will further link all the post office branches with IPPB services by the end of 2018. The move is expected to help in creating the country’s largest banking network with a direct presence at the village level.

The IPPB application will go live on August 21. The app is designed to enable customers to make payments for services to over 100 companies, including phone recharges, electricity bill, DTH services, college fees, among others. It allows payment of services that are registered on the Bharat Bill Payments System of the National Payments Corporation of India.

Inc42 had earlier reported that the IPPB would equip service postmen with smartphones to offer door-to-door banking services. The move was aimed at opening 3,250 customer access points across 650 districts.

Other Payments Banks In India

Similar to the IPPB, other payment banks in India include Airtel Payments bank, Paytm Payments bank, Fino Payments Bank, and Jio Payments Bank.

Jio Payments Bank started its operations in April 2018 and is a joint venture between Reliance Jio and the State Bank of India (SBI). Through the partnership, the SBI will leverage Reliance Jio’s telecom network and Reliance will have access to the SBI’s wide customer base.

Recently, Paytm Payments Bank was asked to stop enrolling new customers after an audit conducted by the RBI. The RBI made observations related to the process being followed by the company to acquire new customers and its adherence to KYC norms.

Fino Payments is also caught in a controversy as the RBI has asked it to put in place appropriate processes to adhere with the central bank’s operating guidelines on deposit limits in customer accounts. The payments bank was pulled up for not following its regulation on capping deposits at $1459 (INR 1 lakh).

[The development was reported by Livemint.]