Reserve Bank of India (RBI) has given its nod to the India Post Payments Bank (IPPB) to start operations.
The existing bank branches are not present in remote areas; various geographical areas have no presence of public sector banks.
If payment banks like post office which have large network come into banking segment it will encourage financial participation in remote areas, provide ease in the transactions and better services to the customers.
IPPB is the third entity got final licence from RBI after Airtel and Paytm payment banks to get the central bank’s approval.
Operations are expected to start before March 31 and will be gradually rolled out in 650 districts using the network of 1.54 lakh post offices.
The government has appointed A P Singh as the interim managing director and CEO of IPPB.
Payments banks are brainchild of former RBI governor Raghuram Rajan, who came up with the idea of differentiated bank licences.
These banks do not offer loans and several other facilities that are offered by full-fledged banks and are not allowed to accept deposits over Rs 1 lakh. But, they can be of immense help in taking banking services across the country and in remote areas.
The postal payment bank will use postmen to help deliver banking services. Postmen will trained in soft skills to be able to carry out banking operations.
The huge network of post offices provides enough muscle to the new player and it has also drawn up plans to offer services through internet and mobile banking, and pre-paid instruments such as mobile wallets, debit cards, ATMs, PoS (point of sale) and MPoS (mobile point of sale) terminals.