India Post Payments Bank starts operations, to be 'game changer'

Keeping the promises made in the Budget 2016, the government on Monday rolled out its flagship India Post Payments Bank (IPPB) with the pledge that the new vertical of India Post would be a game changer for financial inclusion. Apart from providing banking facilities at door step, the motive behind launching of IPPB is aimed at doubling the income of postmen engaged in postal services in rural areas.

According to a senior official, the department is finalising the strategies to provide incentives to India Post's rural correspondents for the delivery of IPPB services at doorsteps of customers. The India Post has huge rural penetration and the department has face value, so the government is very much assure of its grand success, the official said, adding that it's been not yet finalised as whether a postmen would get some fixed incentive or commission on the basis of value of the transaction.

After launching the operations of India Post Payments Bank (IPPB) as two pilot branches at Raipur and Ranchi through video conferencing, Finance Minister Arun Jaitley said, "About 650 IPPB branches will be opened by September this year and that will have a multiplier impact as far as banking in India is concerned."

The Finance Minister further said, "With the IPPB, banking at the doorstep will no longer remain a mere slogan, but will become a reality due to huge postal network in the country. The financial Inclusion is critical for the socio-economic development of the country, but there are significant gaps in this area and a large proportion of country's population remain unbanked or under-banked."

The IPPB will effectively leverage the ubiquitous post office network with its pan-India physical presence, long experience in cash handling and savings mobilization, backed by the ongoing project of IT-enablement, to bridge this gap in financial inclusion, Jaitley said.

In his address, Minister of Communications (I/C) Manoj Sinha commended the hard work done by the Department of Posts in setting up the IPPB and hoped that both organisations will work in tandem to take the benefits of government schemes and financial services that are not easily available in rural areas to customers across the country and to the marginalized population in urban and rural areas alike.

Stressing that IPPB will be the first public payment bank of this level, so it's prime objective is catering to needs of public service rather than promoting commercial interests.