POSTAL BANK BUDGET HIKED TO ~14 BILLION
In yet another step to boost banking services in rural areas, the Centre has raised the outlay for India Post Payments Bank (IPPB) to ~14.35 billion.
The bank will be launched simultaneously in 650 districts and have 3,250 access points across the country.
The launch, scheduled for September 1, will be preceded by an event at Talkatora Stadium where Prime Minister Narendra Modi, central ministers, chief ministers, and MPs will be present.
The Union Cabinet approved an additional ~6.35 billion for the IPPB, of which ~4 billion will be used for technology and ~2.35 billion on human resources. Earlier, the outlay for the bank was ~8 billion. Post launch, the branches will offer a range of products such as savings and current accounts, money transfers, direct benefit transfers, bill and utility payments, and enterprise and merchant payments.
These products will be offered through multiple channels such as counter services, micro automated teller machines, mobile banking apps, short messaging services and interactive voice response. The other unique initiative to be started will be issuance of a quick response (QR) card to customers when accounts are opened.
The card will have a unique QR code, allowing customers to undertake transactions without remembering the account number. According to communications minister Manoj Sinha, with QR code and Aadhaar authentication, all transactions will be hasslefree for customers
The bank will also be offering ‘doorstep banking’ facilities to the unbanked and provide handheld devices and smartphones to postmen.
Since a majority of the IPPB customers reside in rural areas, the QR card and doorstep banking promise to be game changers.
All the 155,000 post offices in the country will be linked to the IPPB system by December 31. The Cabinet has also approved payment of incentive/commission to the last-mile agents (postal staff and gramin dak sewaks) directly into their accounts for providing IPPB services.
A part of the commission, to be paid by the IPPB to the Department of Posts (DoP), will be used for upgrading the infrastructure. The launch will significantly augment the reach and impact of the banking sector in the country. After the IPPB, the number of bank branches in the country will more than double – from the present 140,000 to more than 290,000. Similarly, the number of rural branches in the country will increase from the current 49,000 to more than 175,000, Sinha said. The IPPB has built an integrated model with the DoP, under which post office savings bank account holders will be able to avail of additional services provided by the IPPB, by linking their accounts.
The IPPB, which has already been delayed by several months, is currently running pilot services in Raipur and Ranchi. The DoP was one of the 11 entities to get in-principle nod from the Reserve Bank of India in 2015 for setting up a payments bank. Many other entities, including Airtel, Fino, Paytm, etc, have already launched their services.