Indian Post Payment Bank; India's Most Accessible Banking Network

Indians are waiting eagerly for the launch of the India Post Payments Bank or IPPB. IPPB is expected to start operations in this financial year.

IPPB aims to make India prosperous by ensuring that everyone has equal access to financial information and services, no matter who they are, what they earn and where they live.It will be the largest among the eight that are likely to start operations over the next few months.

Below are the main key features of Indian Post Payment Bank:

Depository functions

Acceptance of demand deposits,i.e.,current deposits, and savings bank deposits from individuals,small businesses and other entities, as permitted.

The payments bank will be restricted to holding a maximum balance of Rs. 1,00,000 per individual customer.

Payment and Cards

Indian Post Payment Bank is a payment bank, so it can issue  ATM cards and debit cards. Payments banks, however, cannot issue credit cards.  Payments and remittance services can be done through various channels including branches, Automated Teller
Machines (ATMs), Business Correspondents (BCs) and mobile banking.

The Internet and mobile banking

Internet banking and mobile banking will be possible for IPPB. The payments bank is expected to leverage technology to offer low-cost banking solutions. The post offices at different levels will be the main customer touch points for the bank's services.

Services offered

IPPB will offer a savings account with up to INR 1,00,000 in the deposit. The products offered by IPPB are different from Post office savings bank products. POSB savings accounts do not have any ceiling limit, unlike payments bank savings account. On the other hand payments, banks can offer current accounts for use by businesses and institutions whereas POSB does not offer these account. 

Bank branches

IPPB is slated to have 650 branches at district headquarters. All post offices across the country will function as customer access points for IPPB.  A close liaison between the bank and Department of Post staff at the access points will be maintained on a regular basis at the branch level for success of the delivery model.

How to receive cash

IPPB can accept remittance from other banks by payment mechanism approved by RBI such as RTGS / NEFT / IMPS   . Payments banks will be permitted to handle cross-border remittance transactions in the nature of personal payments or remittances on the current account. It may undertake utility bill payments etc. on behalf of its customers and the general public.

Who will be the customers

DoP's existing customers will be continued as IPPB's customers. Apart from this IPPB will focus on the underbanked and unbanked population in different parts of the country. It will also try to target services for MSMEs, senior citizens, students, migrant
population, low-income households, unorganized sector and other groups with special service requirements.

Other services offered by IPPB

Payments banks can undertake other non-risk sharing simple financial services activities, not requiring any the commitment of their own funds, such as the distribution of mutual fund units, insurance products, pension products, etc. with the prior approval of the RBI and after complying with the requirements of the sectoral regulator for such products.