Prime Minister Narendra Modi on Saturday launched the India Post Payments Bank (IPPB), through which banking services will conveniently reach the remotest places in the country.
Speaking on the occasion, the Prime Minister recalled that the Union Government had earlier rolled out the Jan Dhan Yojana to establish financial inclusion. He said that the launch of IPPB is one more step to achieve this objective. He said IPPB branches have opened across 650 districts.
The Prime Minister said that the postman has long been a respected and accepted person in the villages. He said the trust on the postman remains, despite the advent of modern technology. He said that the Government’s approach is to reform existing frameworks and structures, and hence, transform them in accordance with the changing times. He said that there are over 1.5 lakh post offices and over three lakh postmen or “grameen dak sevaks” who are connected to the people of the country. Now they shall be empowered with smartphones and digital devices to provide financial services.
Enumerating the benefits of IPPB, he said it will enable money transfer, transfer of government benefits, bill payments and other services such as investment and insurance. He added that postmen would deliver these services at the doorstep. He said that IPPB will also facilitate digital transactions, and help deliver the benefits of schemes such as Pradhan Mantri Fasal Bima Yojana, which provide assistance to farmers.
The Prime Minister said that since 2014, the Union Government has been dealing firmly with the distortions and problems that had arisen in India’s banking sector due to indiscriminate loan advances. He said existing loans have been reviewed and a professional approach has been taken with regard to the banking sector. He mentioned other measures such as the Fugitive Economic Offenders Bill, which have been taken to ensure that the guilty are punished.
The Prime Minister said that now Mudra loans worth over 13 lakh crore rupees have been given to the poor and middle class, for creating self-employment opportunities. He said that today, as India achieves its best ever Asian Games performance, and the economy shows excellent growth numbers, the entire country is full of new self-confidence. He said this is the result of the collective efforts of the people. He said today India is not just the fastest growing economy in the world, but also the country that is eradicating poverty the fastest.
The Prime Minister said that 3 lakh “dak sevaks” would be the key to provide financial services to every home, every farmer and every small enterprise in the villages. He mentioned that in recent months, several steps have been taken for the welfare of “dak sevaks” and to meet their long pending demand. These have led to a substantial increase in their salary, he added. He expressed confidence that IPPB shall reach over 1.5 lakh post offices across the country within the next few months.
The National launch of IPPB is expected to revolutionize the Banking sector as a whole and the way in which banking is being done in the country. Even though the IPPB is a separate entity at its infancy, it has the strong backing of the Department of Posts which is past its sesquicentennial.
The IPPB has been set up under the Department of Posts, Ministry of Communications, with 100% equity owned by the Government of India. Vision and Mission of the bank is to build the most accessible, affordable and trusted bank for the common man and to spearhead the financial inclusion agenda by removing the barriers for the unbanked and under banked population.
Initially IPPB will start with 650 Branches and 3250 access points across the country. Given the reach and network of the Department of Posts, the IPPB is expected to expand to many as 1.55 (1.3 lakh in rural India) access points by the end of the year, which is more than double the existing number of branches of banks in India. In Kerala , 15 branches and 75 access points are getting launched on 1st of September, 2018.
The IPPB will be the most accessible, affordable and trusted bank for the common man. The IPPB will offer a wide range of products such as Savings accounts, Current accounts, Remittances and Money transfer, Direct benefit transfers, Bills and utility payments and Enterprise and Merchant Payments. IPPB has permit to carry RTGS, NEFT, IMPS transaction that will enable IPPB customers to transfer and receive money from any bank account. The payment bank can be used by government to distribute MGNREGA wages, subsidies, pension, etc.
The IPPB app will be launched on same day that will enable the customers to pay for services of around 100 firms including phone recharges and bill, electricity bill, DTH service, college fees, etc., that are present on Bharat Bill payments system of National Payments Corporation of India.
Four types of Accounts can be opened in IPPB namely Basics Savings account, Regular Savings Account, Current account and Digital savings account. Basic savings account has all the features and benefits offered by the Regular Savings Account (except that it allows only four cash withdrawals in a month). The aim of the basic savings account is to provide primary banking services at a very nominal charge. One of the salient features of this scheme is instant and paperless account opening and no monthly average balance required to be maintained. Interest rate for Basic Savings account is 4.0% per annum
The Regular Savings Account can be opened at the bank’s access points and your doorstep. This account can be used to keep funds secure, withdraw cash, deposit money and perform easy remittances, besides a host of other benefits. In addition, interest can be earned on the money kept in this account and the cash withdrawals allowed in this account are unlimited.
IPPB also offers the facility of a Current Account to the small merchants and individual businessmen. This account is a prerequisite for carrying out and expanding business. IPPB’s Current Account gets you started on the road to digital transactions for your business needs. Along with this, IPPB also offers a Merchant App for meeting business requirements. The current account can be opened at the Post Office Counters or at your doorstep through our Postman/GDS. Nominal monthly average balance required to be maintained.
For the people who are tech savvy and comfortable with technology, IPPB’s Digital Savings Account is the best way to onboard yourself through the IPPB Mobile App. This app can be downloaded from the play store on your Android phone. Anyone above the age of 18 years, having Aadhaar and PAN card, can open this account. The account can be opened instantly from the comfort of your home, which means banking anytime, anywhere.
Customers will be offered 4% interest on Savings account deposits which is limited to Rs. 1,00,000/-. Being a payments bank the IPPB will not offer loan and insurance facility of its own, but the same will be offered through third party products. These insurance products will be complementary to the existing Postal Life Insurance products of the Department of Posts. The channels of offer of the above said services would be Counter services, Micro-ATM, Mobile Banking App, SMS and Interactive voice response (IVR) , all supported by cutting edge technology.
Ahead of the launch of the India Post Payments Bank, Cabinet of the Government of India has approved an increase of 79.3% in the project outlay for setting up the India Post Payments Bank from Rs 800 crore to Rs 1,435 crore. Of this additional Rs 635 crore, Rs 400 crore will be utilized towards implementation of Technology and Rs 235 crore for Human Resources Development. With such a robust amount being induced in the IPPB, it is expected to develop faster and earn profits in three years now.
Other advantages of IPPB would be that it has a work force base of around 3 lakh personnel consisting of postmen and Gramin Dak Sevaks capable of offering doorstep banking service across the length and breadth of the country. Opening of account has been made simple and paperless using Aadhaar Card. Digital transactions can be made with the help of Quick Response cards (QR Cards). These initiatives are surely capable of moving India from a cash dominated economy to a digital economy in the days to come. The transition of the people to a digital platform will be assisted by IPPB through Financial Literacy, educating the customers on the need for insurance and the ways to grow wealth.
Department of Posts has been a pioneer of Financial Inclusion in the country since long. The IPPB has been built strongly as an integrated model with the Department of Posts and both are expected to complement each other. The IPPB will facilitate Post offices to accept digital payments at counters, offer small savings schemes online and increase its share in the booming eCommerce sector. Post Office savings accounts can act as sweep out accounts of IPPB account once the balance in the account exceeds the permitted limit of Rs One lakh. Post Offices are expected to undergo a digital transition once the IPPB is launched. Both India Post and IPPB are expected to function shoulder to shoulder and act as catalysts for Nation Building.
During the launch, the Prime Minister will release a special cover on Financial Inclusion also. In Kerala circle the special cover will be released by Chief Postmaster General in a small function to be held in Office of Chief PMG, Trivandrum.