Prime Minister Narendra Modi has launched India Post Payments Bank or IPPB -- the largest payments bank in the country by network size -- in New Delhi on Saturday, September 1.
The new bank will leverage the postal department's vast network across India and help people in previously unbanked rural locations to use banking services easily, the Prime Minister's Office tweeted. The payments bank sector in India grew and expanded in lightning speed after the Reserve Bank of India approved several applicants in 2015.
What is IPPB?
According to a report on Times of India, the IPPB is a public sector company under the department of posts and ministry of communication where the Indian government holds 100 percent equity.
The payments bank will be governed by the Reserve Bank of India. All the 1.55 lakh post offices in the country will be linked to the IPPB system by December 31. Suresh Sethi is the managing director and chief executive of IPPB.
How will it function?
IPPB will offer a range of products such as savings and current accounts, money transfer, direct benefit transfers, bill and utility payments, and enterprise and merchant payments. These products and related services will be offered across multiple channels (counter services, micro-ATM, mobile banking app, SMS and IVR), using the bank's state-of-the-art technology platform. The plan is to use all of India Post's 1.55 lakh access points by December to provide the service.
Reports further suggested that the IPPB will not offer any ATM debit card. Instead, it will provide its customers with a QR Code-based biometric card. It has already tied up with PNB Metlife and Bajaj Allianz to sell insurance products and hopes to enter into more financial service partnerships.
Earlier this week, the cabinet had approved 80 percent increase in spending for IPPB to Rs 1,435 crore, a move that will arm it with additional ammunition to compete aggressively with existing players like Airtel Payments Bank and Paytm Payments Bank.
