Indian postmen turn bankers

Modi launches initiative to offer financial services to poor in rural areas

Indian Prime Minister Narendra Modi launched a payments bank yesterday to turn postmen into bankers so they can offer financial services to the poor in rural areas and boost digital transactions.

Modi has since 2014 sought to end what he has called “financial untouchability” by giving millions of people access to banking services in India, which the World Bank estimates has 190 million people without a bank account, second only to China.The India Post Payments Bank will start operations with 650 branches. Accounts will be able to hold a maximum of Rs100,000 ($1,408) in deposits and will offer limited services.

The government said it planned to link its 155,000 post offices to the new payments bank network by December 31 to offer basic bank account services, money transfers and bill payments.

“Using this initiative, we will take the bank to villages and to the poor,” Modi said at the launch event in New Delhi. More than 300,000 postmen will use smartphones and other digital devices to offer doorstep banking services in remote areas of the country.

The campaign to bring the masses into the financial system could help bolster economic growth and improve Modi’s popularity among the poor ahead of next year’s national election.

Indian Prime Minister Narendra Modi speaks during the launch of India Post Payments Bank (IPPB), in New Delhi yesterday. IPPB will take banking to the doorstep of every citizen through a network of post offices and almost 300,000 postmen and ‘grameen dak sewaks’. It will be like any other bank, but its operations will be on a smaller scale without involving any credit risk. It will carry out most banking operations like accepting deposits but can’t advance loans or issue credit cards. IPPB will be available through 650 branches and 3,250 access points.