How 1.55 lakh post offices will turn into payments bank service - 5 points

Mumbai: The India Post Payments Bank is ready to turn 1.55 lakh post offices and 3 lakh employees into India’s second-largest payments bank in terms of reach.

Payments bank is a new model of banking that allows mobile firms, supermarket chains to cater to banking requirements of people. They can accept deposits of up to Rs 1 lakh. Payments banks confine their activities to acceptance of demand deposits, remittance services, Internet banking and other specified services.

Here are 5 things about India Post Payments Bank:

1. Currently, India Post Payments Bank offers three kinds of savings accounts: Saral, Safal, Sugam.

2. It offers savings account up to a balance of Rs 1 lakh, along with digitally enabled payments.

3. India Post Payments Bank offers an interest rate of 4.5 per cent on deposits up to Rs 25,000, 5 per cent on Rs 25,000-50,000 and 5.5 per cent on Rs 50,000-1,00,000.

4. According to the Chief Executive Officer A P Singh, IPPB will be convert Aahaar into payment address. "We will convert it (Aadhaar) into payment address. We will get this activated by offering a host of payment services," he said.

"We have taken up the challenge on ourselves as to how we make a Rs 10 transaction viable. Aadhaar authentication cost less than 1 paisa. There is no reason why a payment transaction should be transacting anything more," Singh said.

5. IPPB also offers Direct Benefit Transfer (DBT). "Funds from the disbursing agency are automatically credited into the beneficiary accounts through NACH/APBS instead of cash disbursal. IPPB will provide cash out of the subsidies at the customer's doorstep by combining this service with Doorstep Banking," reads the IPPBS website.