AP Singh, the CEO of India Post Payments Bank has confirmed that the institution will offer financial services to the public throughout the country via 1.55 lakh post offices (having an overall staff of more than 3 lakh), by the end of the year 2018. India Post Payment Bank will be the second-largest payment bank in the nation if it achieves the said target.
Key Highlights of the India Post Payments Bank
The CEO also stated that the bank will have a presence in every district of the nation by March 2018. Further, by the end of the year 2018, the payment solutions will be rendered across 1.55 lakh post offices with the help of devices that will be operated by ‘Grameen dak Sevak and postmen. Airtel Payments Bank, launched in January 2017, commenced its operations via a 2.5 lakh merchant network.
- Through this model of banking, business firms like mobile companies, supermarket chains, etc cater to individual banking needs at a smaller scale.
- Payment banks have a restricted area of working and they cannot perform activities much like a commercial bank.
- AP Singh told that IPPB will use Aadhaar Card data for the purpose of making payments to individuals which will ultimately minimize transaction cost to 1 paisa per transaction.
- These banks can only perform remittance services, take demand deposits, render internet banking services and a few more like them.
Features of India Post Payments Bank
- A maximum amount of Rs. 1 lakh can be accepted by payments banks as deposits from individuals and small businesses.
- Interest rate offered by the India Post Payments Bank (IPPB) is 4.5% on balance up to Rs. 25,000, 5% for balance between Rs. 25,000 and Rs. 50,000, and 5.5% for balance between Rs. 50,000 and 1 lakh.
- Moreover, Aadhar authentication charges are as less as 1 paisa per transaction and hence there would not be subsequent higher charges for any payment transactions.
The conversion of Aadhaar into the payment address will be used through many payment services. AP Singh also explained the route map of how the bank will reach the general public in the country and will make them access digital banking. TRAI (Telecom Regulatory Authority of India) Chairman also stated that transaction costs of digital payments need to be minimized and made affordable to benefit the common man.