India Post Payments Bank is gearing up to emerge as the second largest payments bank by expanding the reach of its financial services through all its 1.55 lakh post offices and 3 lakh employees pan-India by end of 2018.
The payments banks will be able to accept deposits of upto Rs one lakh per account from individuals and small businesses. It is a new model of banks, though these cannot disseminate loans.
“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.
“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,” he added.
The new model of banking allows mobile firms, supermarket chains and others to cater to banking requirements of 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, that too at an affordable transaction cost on digital payments.
Currently, India Post Payments Bank is offering Savings accounts with a balance of up to Rs one lakh, along with digitally enabled payments and remittance services of all kinds between individuals. It offers an interest rate of 4.5 per cent on deposits up to Rs 25,000, 5 per cent on the range from Rs 25,000-50,000 and 5.5 per cent on range varying from Rs 50,000-1,00,000.