India Post Payments Bank (IPPB)
Context
Recently, India Post Payments Bank (IPPB) reported that it opened 6,80,794 accounts in Maharashtra’s Sambhaji Nagar (Aurangabad) district, reflecting its robust outreach initiatives.
- The bank was established to drive financial inclusion, but it also actively conducts awareness campaigns and camps to educate the public, especially in rural areas, about its services and benefits.
Relevance:
GS-03 (Economy)
Key Highlights
- IPPB accounts have been opened across the country, with Maharashtra leading with 1.63 crore accounts.
- Uttar Pradesh follows closely with 1.70 crore accounts, and Bihar boasts 1.33 crore accounts.
- Madhya Pradesh: 69.66 lakh accounts, 32.23 lakh DBT beneficiaries, and 41.51 lakh Aadhaar updates.
- Karnataka: 59.04 lakh accounts, with 38.64 lakh Aadhaar updates.
- Maharashtra: 163.13 lakh accounts, the highest number of DBT beneficiaries at 79.5 lakh, and 62.18 lakh Aadhaar updates.
- IPPB enables doorstep delivery of essential services using handheld devices, bringing banking closer to people.
Indian Post Payments Bank (IPPB):
- IPPB was launched on September 1, 2018, with an aim to build the most accessible, affordable, and trusted bank for the common man in India.
- It is established under the Department of Posts, Ministry of Communication, with 100% equity owned by the Government of India.
- Headquarters: New Delhi
- It operates under the paperless, cashless, and presence-less banking principles.
- Recently, in August 2023, it reported its first-ever operational profit of Rs 20.16 crore for 2022-23.
- The bank even saw a 66.12% growth in overall revenue.
What is a “Payments Bank’?
- A payments bank is much like traditional banks but with a slight change in the way it operates.
- It operates on a smaller scale, with no involvement in credit risk but with the primary goal of extending payment and financial services to small businesses, low-income households, and migrant workers in a secure, technology-driven environment.
- It was set up on the recommendations of the Nachiket Mor Committee.
- Permitted Activities of Payment Banks:
Deposits:
- Can accept deposits up to ₹2 lakh per customer.
- Offer demand deposit accounts, including savings and current accounts.
Investments:
- Funds collected as deposits must be invested securely.
- 75% of the demand deposit balance in government securities under the Statutory Liquidity Ratio (SLR).
- The remaining 25% in time deposits with scheduled commercial banks.
Banking Services:
- Remittance services.
- Mobile payments, transfers, and purchases.
- Facilities like ATM/debit cards, net banking, and third-party fund transfers.
Restricted Activities:
- Lending: Cannot issue loans or credit cards.
- Deposits: Not permitted to accept time deposits or NRI deposits.
- Subsidiaries: Cannot establish subsidiaries for non-banking financial activities.
- Payments banks focus on improving financial inclusion while maintaining a low-risk profile by adhering to these guidelines.
Conclusion
India Post Payments Bank continues to revolutionise banking accessibility, especially in underserved areas. With its wide-reaching network, innovative services, and integration with government schemes, it is driving financial inclusion and empowering millions across the country.
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