‘Financial inclusion the main mission of IPPB’

NEWDELHI:AHEAD of the launch of India Post Payments Bank (IPPB) by Prime Minister Narendra Modi on Saturday, the managing director and chief executive officer (CEO) of the bank, Suresh Sethi, spoke to Mint about IPPB’S objectives, goals and expansion plans. The bank has been incorporated as a public sector company under the department of posts (DOP) with 100% government equity and is governed by the Reserve Bank of India (RBI). Edited excerpts from an exclusive interview:

What is the main aim of setting up IPPB?

We are looking at financial inclusion as the main mission of the bank. Our focus will be on segments that today have challenges in either accessibility or affordability. From a vision perspective, we are looking to bring the most affordable, accessible and trustworthy bank to the last mile consumer.

What are the key focus areas?

The segments that we are looking at specifically include homemakers, senior citizens, urban migrants, people in rural India, including students who come to urban areas for education and need funds. We will also be looking at unorganized retail where payments today are largely dominated in cash. We want to create a less cash system so that kirana stores and merchants would become part of the ecosystem where IPPB accounts can be used and they can interact digitally rather than accepting cash.

How will the bank benefit by operating under DOP?

DOP becomes very critical for bringing a change of this scale because of its huge physical network and human capital. Today, DOP has around 1.55 lakh points of service out of which 1.30 lakh are in rural India. Today, there are around 50,000 bank branches all put together. Now, if we look at the fact that we bring in around 1.3 lakh points of service, the rural banking ecosystem will get scaled up by 3.5 times. This brings us to a very different comparison on what we can do for the last mile.

Any plan to scale up the number of banking agents?

I think this is a big enough number to begin with. Our biggest leverage is going to be able to make each and every of these 300,000 people financially literate to be able to advise somebody about banking services.