NEW DELHI: Post offices, which had so far been primarily tasked with ferrying letters and goods, have now become full-fledged banks. The ruling government’s ambitious project to transform the existing massive network of postal offices into ‘something relevant’ got a big boost on Saturday when Prime Minister Narendra Modi launched the India Post Payments Bank (IPPB).
IPPB on Saturday went live at 650 branches and 3,250 access points. It will be scaled to all 1.55 lakh post offices by December 2018, thus making it nearly 2.5 times bigger than the existing banking network. Of these, 1.30 lakh access points will be located in rural areas. IPPB also has permission to link around 17 crore Post Office Savings Bank accounts with its own set-up.
Modi, while launching the service, said that IPPB will play a major role in the financial inclusion of rural India. “Post offices and postmen are connected to rural people and with the kind of robust network they have, they will play a big role in the financial inclusion of rural India, which, so far has been kept away from banking services,” Modi said, opening an IPPB account for himself.The three lakh postmen and ‘Grameen Dak Sewaks’ will now act as banking agents for IPPB and would be equipped with a smartphone and biometric devices to offer banking solutions at doorsteps. Postmen will also see their wages go up from Rs 2,000-Rs 4,000 to Rs 10,000-Rs 14,000.
The IPPB will be like any other bank, but with operations on a smaller scale, without involving any credit risk. They will be allowed to accept deposits of up to Rs 1 lakh, said Communications Minister Manoj Sinha. He informed that IPPB will use Aadhaar to open accounts, while a QR card and biometrics will drive authentication, transactions and payments. It will offer a four per cent interest rate on savings accounts.
While IPPB itself cannot provide loan and insurance service to its account holders, it will take a third route to provide the additional services. It has teamed up with PNB and Bajaj Allianz Life Insurance for the same. IPPB also launched a mobile app for Android users to facilitate online banking services as well as payments for various utilities and services such as phone bill, DTH, gas connection and electricity.