India Post to open all 1.55 lakh offices for payment bank service by 2018-end
14 September 2017
India Post Payments Bank (IPPB) will be providing payment bank services countrywide, across all the 1.55 lakh post offices – opening the widest network of payment bank offices and the second-largest in terms of reach - by the end of 2018.
A 100 per cent government of India undertaking, IPPB was incorporated as a public sector bank under the Department of Post on 30 January 2017.
With 1.55 lakh post offices and 3 lakh employees by the end of 2018, IPPB will be fully equipped to serve as a payment bank by the end of 2018
"We will have post bank footprint in every district by March 2018, and before the end of the calendar year, all 1.55 lakh post offices and every postman and grameen dak sevak, which is another 3 lakh, will be equipped with a device which will provide full range of payment solutions that we will be hosting," India Post Payments Bank (IPPB) chief executive officer A P Singh said at an event organised by United Nations on Financial Inclusion.
Currently, private sector telecom firm Bharti Airtel operates Airtel Payments Bank. Launched in January this year Airtel payments bank started operations with a network of 2.5 lakh merchants.
Under the payments bank model, mobile firms, supermarket chains and others can cater to banking requirements of individuals and small businesses.
Payments banks can accept deposits of up to Rs1 lakh per account from individuals and small businesses.
It will be set up as a differentiated bank and will confine its activities to acceptance of demand deposits, remittance services, internet banking and other specified services.
IPPB offers an interest rate of 4.5 per cent on deposits of up to Rs25,000, 5 per cent on Rs25,000-50,000 and 5.5 per cent on Rs50,000-1,00,000.
"While our private sector counterparts will, I take it very positively, skim the market from the top, you need someone who works bottoms up. That is our choice," Singh said.
Singh said IPPB has been created to take digital payments to masses, adding that it will be using Aadhaar as payment address and bring down transaction cost to the customer close to 1 paise.
At the event, Telecom Regulatory Authority of India Chairman R S Sharma said transaction cost on digital payment should be very minimal and it should be made affordable.
"We will convert it (Aadhaar) into payment address. We will get this activated by offering a host of payment services," Singh said.
"We have taken up the challenge on ourselves as to how we make a Rs 10 transaction viable. Aadhaar authentication cost less than 1 paisa. There is no reason why a payment transaction should be transacting anything more," Singh said.
At present, private players and even public banks charge transaction fee even on digital payments, depending on the nature of the transaction.