Prime Minister Narendra Modi on Saturday launched India Post Payments Bank (IPPB) aimed at strengthening financial inclusion by taking banking services to the unbanked rural areas across the country.
The payments bank would initially provide current and savings account facility at 650 post offices and 3,250 access points.
"The India Post Payments Bank will further the process of financial inclusion which started with the launch of Jan Dhan Yojana launched in 2014," said the Prime Minister speaking at the launch.
By 2018-end, the number of access points would increase to 1.55 lakh, of which 1.30 lakh branches would be in rural areas, according to the Communications Ministry.
"The Indian Postal Department has 1.5 lakh post offices and more than 3 lakh postmen. We have taken the onerous task of linking such an extensive system with technology to build the most powerful system. Now the postman is equipped with a smartphone and has a digital device in his bag," Modi said.
Farmers and daily wage earners under the Pradhan Mantri Fasal Beema Yojana and Mahatma Gandhi National Rural Employment Guarantee scheme would be among the key beneficiaries as they can receive their claims through the payments bank, he said.
According to the Communications Minister Manoj Sinha, people can open their accounts in the bank in less than a minute through Aadhaar cards and transactions can be done through Quick Response (QR) card provided by the bank without the need to remember account numbers and passwords.
Account holders of the Post Office Savings Bank would also be able to avail of IPPB services by linking their accounts, he added.
Although payment banks are not mandated by the Reserve Bank of India to provide loans and insurance, IPPB has tied up with the Punjab National Bank and would work as an agent of the bank to provide loans to the account holders. Interest on loans would be the rate PNB charges and IPPB would not charge any commission for its service.
The bank would provide services such as current account, savings account, remittances, money transfer, direct benefit transfer, enterprise and merchant payment, the minister said, adding that the services would be available through multiple channels, including counter services, micro ATM, mobile banking applications, SMS and IVR (Interactive Voice Response).