The India Post Payments Bank which was officially introduced in India, now counts 170 million Post Office Savings Bank accounts to the active accounts in the banking system. This system launched by PM Narendra Modi has resulted to be a masterstroke with highest number account holders within a short time span.
Holders of Post Office Savings Bank accounts can now make inter-operable digital payments, including transfers under NEFT, RTGS, UPI and bill payment services. IPPB will enable acceptance of digital payments across post offices in the country in line with the digital payments initiative of the government. IPPB branches have been opened in across 650 districts and 3250 access points across the country.
PM Narendra Modi launched the India Post Payments Bank (IPPB) at Talkatora Stadium in New Delhi at a function witnessed at over 3,000 locations across the country. He specified that through the IPPB, banking services will conveniently reach the remotest places in the country, and the people living there.
There are over 1.5 lakh post offices and over three lakh postmen or “Grameen dak sevaks” who are connected to the people of the country. Now they will be empowered with smartphones and digital devices to provide financial services.
Further enumerating the benefits of IPPB, it will enable money transfer, transfer of government benefits, bill payments and other services such as investment and insurance. Postmen would deliver these services at the doorstep. IPPB will also facilitate digital transactions and help deliver the benefits of schemes such as Pradhan Mantri Fasal Bima Yojana, which provide assistance to farmers.
PM Modi said since 2014, the Union Government has been dealing firmly with the distortions and problems that had arisen in India’s banking sector due to indiscriminate loan advances. He said existing loans have been reviewed and a professional approach has been taken with regard to the banking sector. He mentioned other measures such as the Fugitive Economic Offenders Bill, which have been taken to ensure that the guilty are punished.
What is Payments bank?
According to the RBI guidelines for licensing of Payment Bank, the main objective of a payments bank is to enhance financial inclusion, especially for rural or remote areas. This is expected to be done by providing small savings accounts, payments and remittance services to migrant labour workforce, low income households, small businesses, other unorganized sector entities and other users.
In August 2015, RBI had given in-principle approval to 11 entities to start payments bank in India, which included the department of posts. Airtel Payments Bank was the first one to launch. At present, other payments banks like Paytm Payments Bank, Fino Payments Bank and Aditya Birla Payments Bank are also operational. IPPB had started operations at two pilot branches in January 2017.
How does it stand out of other banks?
Payments bank aims to further financial inclusion, especially through savings accounts and payments services. Accordingly, a payments bank is not allowed to give any form of loan or issue a credit card, which is also a form of unsecured personal loan.
Even in case of savings accounts, a payments bank has certain restrictions. Customers can open a savings account with deposits of only up to ₹1 lakh, which is also the maximum balance allowed. These banks currently offer interest rates similar to that being offered by regular banks. As per RBI guidelines, payments banks can’t accept fixed or recurring deposits.
Source: www.domain-b.com
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