The Central Government has approved additional funding of Rs 635 crore for the India Post Payments Banks, taking the total outlay in the IPPB to Rs. 1435 crore. The IPPB, which is set to be launched on September 1, will primarily seek to provide financial services to Indians living in rural areas.
“The IPPB will spearhead the financial inclusion agenda by removing barriers for the unbanked and underbanked population,” Manoj Sinha, minister of state for communication (Independent Charge), said.
The bank which will be fully owned by the government of India will provide savings and current accounts, remittances, money transfers, bill and utility payments and enterprise and merchant payments.
While the IPPB is not authorised to provide lending and insurance services, it will act as an agent of Punjab National Bank to provide loans to its clients and has entered into a partnership with Bajaj Alliance Life Insurance to provide life insurance.
“The trusted postman will now become a banker to millions of unbanked and underbanked Indians,” said Sinha, adding that the IPPB will give work to a postal service that has become overstaffed due to a decline in the demand for postal services.
Approximately 40,000 postmen will provide door step banking to IPPB customers.
The IPPB will have 650 branches and 3250 access points and 11,000 micro ATMs at launch but by December 31, it will launch 1,55,000 access points for services across the country of which 1,30,000 will be in rural areas.
This is will vastly increase access to banking services in rural areas which are currently only served by a total of 49,000 bank branches, said Sinha.