Union Cabinet approves setting up of India Post Payments Bank
The Union Cabinet has given its approval for setting up the India Post Payments Bank (IPPB) as a Public Limited Company under the Department of Posts.
It will have 100% Government of India (GOI) equity and shall be established with total expenditure of 800 Crore rupees. Now, the IPPB will obtain banking licence from RBI by March 2017 and by September 2017.
- IPPB will start operations in March 2017 in about 50 districts and will cover the entire country by the end of FY 2018-19.
- It will generate employment opportunities for about 3,500 skilled banking professionals, will set up 650 branches and 5,000 ATMs across the country.
- Services of IPPB will be available across the country through its 650 payments bank branches.
- Its services will be linked post offices and alternative channels riding on modern technology including ATMs, mobiles, simple digital payments and PoS/m-PoS devices etc.
- It will also generate opportunities for propagating financial literacy across the country and help furthering the cause of financial inclusion.
- The Secretary, Department of Posts will be the Part time, Non-Executive Chairman of the Bank.
The India Post Payments Ban will benefit all citizens, especially the 40% of the country’s population that is outside the ambit of formal banking in the country. It will leverage the Department of Post’s network, resources and reach, to make simple, low-cost, quality financial services easily accessible to customers all over the country.
Setting-up of the IPPB to further financial inclusion was one of the budgetary announcements during 2015-16. In September 2015, the Department of Posts along with other 10 entities had received in-principle approval of the RBI to set up Payments Bank.
Some of functions of Payments Bank: (i) It can hold a maximum balance of 1 lakh rupees per customer. (ii) It can an issue ATM/debit cards but not credit cards (iii) Offer payments and remittance services (iv) Deal in simple financial products like insurance products and mutual fund units. (v) It cannot undertake lending service.
Month: Current Affairs - June, 2016