Prime Minister Narendra Modi government has launched India Post Payment Payments Bank (IPPB) on Saturday, September 1 at Talkatora Stadium in New Delhi. Touted as the largest payments bank in the country by network size, the bank will be leveraging the vast postal network of nearly 1.55 lakh post offices and 3 lakh postmen to bring doorstep banking services to people across the nation, especially in rural areas.
According to the IPPB website, it is a public sector company under the Department of Posts, Ministry of Communication where Government owns 100% equity. It will be governed by the Reserve Bank of India and will offer services like savings and current accounts, money transfers, direct benefit transfers, bill and utility payments, and enterprise and merchant payments.
The IPPB services had started operating in January last year with two experimental branches- in Raipur, Chhattisgarh and Ranchi, Jharkhand
Services Offered by the IPPB
According to Money Control, the IPPB will work just like any other banking organisation, only at a smaller scale. The bank can accept deposits of up to Rs 1 lakh per account from individuals and small businesses, but cannot give loans or issue credit cards. In case a deposit exceeds Rs 1 lakh in an account, the excess will be automatically converted into Post Office Savings Bank Account (PSB).
IPPB offers three types of savings accounts: Regular savings account, Digital savings account and Basic savings account. The annual interest rate for all three is fixed at four per cent. Moreover, a regular savings account can be opened even with zero balance. There are unlimited cash withdrawals allowed in this account.
The bank will also offer payments and remittance services, mobile payments/transfers/purchases and other banking services like ATM debit cards, net banking and third party fund transfers. It has partnered with Punjab National Bank and Bajaj Allianz Life Insurance to be able to give loans, and insurance reports Time Of India.
How Can We Use The Services Offered by IPPB?
Presently, all of the facilities offered by the institution can be accessed through 650 branches (one in almost every district) and 3,250 access points across the nation. The bank will slowly link all 1.55 lakh post offices in the country as access points by the end of the year.
The IPPB will require a person’s Aadhar card to open an account, and a QR card along with biometrics to drive authentication, transactions and payments. The postmen will be armed with smartphones and biometric devices when they visit your door.
People can use the bank’s products and services in many ways like counter services, ATMs, mobile banking app, SMS and Interactive Voice Response (IVR). IPPB is also going to launch an app to facilitate online banking service and utility payments like the phone bill, DTH, gas connection, electricity etc. Additionally, the app will only offer all of its banking services after completing the KYC (Know Your Customer) requirement.
“Aapka Bank, Aapke Dwaar”
According to NDTV, the bank was set up to help people living in previously unbanked rural areas to be able to use banking services effectively. According to Suresh Sethi, CEO of IPPB, the bank was set up to further financial inclusion for urban migrants, low-income households, people in rural areas, senior citizens and other unorganised retail sectors.
IPPB is the third entity in the country to acquire payments bank permit. The Cabinet recently allowed an 80 per cent increase in funding for the IPPB to Rs 1,435 crore, to let the bank compete with Airtel and Paytm Payments Bank.
The IPPB also has permission to link 17 crores PSBs with its accounts, a move that has given the bank a significant edge over private entities that have spent a lot of capital to get customers.
PM Modi criticises UPA while praising his government
During his speech at the IPPB inaugural event, Modi said that a majority of the funds were reserved for the rich under the previous government. He said the payments bank is a step to make the banking system available at every corner of the country.
PM Modi also said that a mere phone call from a ‘Namdar’ was enough for the banks to give loans worth billions to businessmen close to ‘one family’, even though they (previous government) knew the loans would not be paid back.
He alleged that the previous UPA government hid the correct figures of the non-performing assets (NPA). Instead of the Rs 2 lakh crore disclosed to the public, the NDA government found it to be Rs 9 lakh crore, terming it the biggest scam by the previous government.
He called the situation a landmine, adding that had they revealed the truth, the ensuing explosion of the landmine would have made it very difficult to handle the economy. The PM said that it was the NDA government who defused the landmine, by taking steps such as reviewing existing loans over Rs 50 crore and the Fugitive Economic Offenders Bill.
Prime Minister Modi also said that from the time of our independence to 2008 the total loans given were Rs 18 lakh crore, a figure that rose to Rs 52 lakh crore in the next six years during UPA government’s reign. Modi also assured that the NDA government did not give a single loan to any of the 12 big defaulters with a total outstanding of Rs 1.75 lakh crore.
Despite these claims, a parliamentary committee report published recently revealed that the NPAs under the present government has increased by Rs 6.2 lakh crore between 2015-2018.
Also Read: Report Showing Higher GDP Growth During UPA Tenure Removed From Govt Website