Government has allocated an amount of Rs 500 crore to India Post Payments Bank for the financial year 2017-18 to help it in setting up 650 branches across country by September 2017.
- As per Output-Outcome Framework for Schemes 2017-18 for the Department of Posts released on February 13, 2017, out of the allocated amount, Rs. 125 crore has been allocated as “capital infusion into corporate entity for India Post Payments Bank” and Rs 375 crore as “grant in aid to India Post Payments Bank (IPPB)”.
- India Posts is the second entity after Airtel to roll out payments bank. The pilot branch has been set up in Raipur and Ranchi.
- Airtel has earmarked Rs3,000 crore as initial investment for pan-India operations with an interest rate of 7.25% on deposits.
- This allocation is a part of the Rs. 1,034.13 crore earmarked for the Department of Posts by the government. Under it, centre has infused Rs 279.6 crore for providing IT hardware and software in identified rural areas for improved access to services and customer satisfaction, resulting in increase in customer transactions, traffic and revenue.
- Besides, Rs 110.83 crore has been allocated for establishing e-commerce, parcel booking, international business centres, Rs 73.5 crore for estates management, Rs 32 crore for mail operations and Rs 17.7 crore for equipments and IT infrastructure in rural post offices.
- Apart from this, government has allocated Rs 3.8 crore for setting up 246 offices and 200 outlets for providing better access to communication and financial services.
About India Post Payment Bank (IPPB)
India Post Payment Bank (IPPB) has been recently incorporated as a Public Limited Company under the Department of Posts with 100% GOI equity.
- The total paid up equity of the IPPB is Rs 800 crore, of which the government has already infused Rs 275 crore.
- Payments banks can accept deposits such a saving and current accounts up to Rs 1 lakh per account from individuals and small businesses.
- Besides, IPPB also offers digitally enabled payments and remittance services of all kinds between entities and individuals and also provide access to third party financial services such as insurance, mutual funds, pension, credit products, forex, and more, in partnership with insurance companies, mutual fund houses, pension providers, banks, international money transfer organisations, etc.
- The IPPB will offer an interest rate of 4.5 per cent on deposits up to Rs 25,000; 5 per cent on deposits of Rs 25,000-50,000 and 5.5 per cent on Rs 50,000-1,00,000.
- The four key features of IPPB include, financial literacy, streamlining payments, financial inclusion and ease of accessibility.