India Post Payments Bank

• 24 Aug 2023

Source: PIB

Why in News?

India Post Payments Bank (IPPB) has marked a significant milestone in the world of banking services with its continued profit streak, demonstrating its commitment to sustainable financial inclusion and citizen empowerment.

• IPPB on August 22,2023 reported its first-ever operational profit of Rs 20.16 crore for 2022-23. The bank saw a 66.12% growth in overall revenue.

What is India Post Payments Bank (IPPB)?

• About:
  • Launched on September 1, 2018, with 100% equity owned by the Government of India.
  • IPPB embarks on its transformative journey with the launch of pilot branches.
    • Pilot branches opened in Ranchi, Jharkhand, and Raipur, Chhattisgarh.
  • Leveraging India's vast postal infrastructure with 1,55,000 Post Offices and 3,00,000 postal employees.
• Vision: To create an accessible, affordable, and trusted bank for all citizens.
• Principles and Approach:
  • IPPB adopts the principles of India Stack to drive its operations.
    • Paperless, Cashless, and Presence-less Banking: Aims to facilitate banking through innovative technology and secure transactions.
  • Implements Biometrics integrated smartphones and biometric devices for seamless transactions.
  • IPPB delivers simple and affordable banking solutions through intuitive interfaces available in 13 languages.
• Empowering Financial Inclusion:
  • IPPB is committed to serving the unbanked and underbanked.
  • Contributed to the vision of a less cash economy and Digital India.
  • Ensured equal opportunities for financial security and empowerment.
• Empowerment Initiatives:
  • Recognized the tireless contributions of Postmen/Gramin Dak Sevaks.
  • Introduced 'Niveshak Didi' initiative, for empowering women beneficiaries.
  • IPPB introduced services including loan referral services, low-cost health & accidental products like Antyodaya Shramik Suraksha Yojana for Shramyogis registered on the e-Shram portal, Digital Life Certificate to pensioners, citizen services initiatives like Aadhaar-mobile update, child Aadhaar enrolment, Aadhaar based banking transactions (AePS), enabling citizen access to govt. Direct Benefit Transfer programmes like PM KISAN etc.
• Future Goals:
  • Aims to transform into a Universal Service platform.
  • Leverages technology for expanded accessibility and reach.
  • Focuses on innovation to empower citizens and contribute to a digitally inclusive society.

Payment Bank:

• Payments banks were part of the Reserve Bank of India’s strategy of offering differentiated banking licenses.
• A committee headed by Dr. Nachiket Mor recommended setting up of 'Payments Bank' to cater to the lower income groups and small businesses.
  • A payments bank is a differentiated bank, offering a limited range of products.
• It can accept demand deposits only that is savings and current accounts, not time deposits.
• Payment banks are restricted to holding a maximum balance of Rs. 2,00,000 (Rupees Two lakh only) per individual customer.
  • Payment Banks cannot accept Non-Resident Indian (NRI) deposits.
• The Payment Banks cannot set up subsidiaries to undertake non-banking financial services activities.