National

PM Narendra Modi launches India Post Payments Bank

NEW DELHI, SEP 1 (AGENCIES) | Publish Date: 9/1/2018 12:56:33 PM IST

Prime Minister Narendra Modi Saturday said loan defaulters will not be spared and the government was working speedily towards recovery of bad loans. Modi was speaking at the launch of the India Post Payments Bank (IPPB), which aims to bridge the last-mile gap in banking services.

“Every penny of loans given at the behest of ‘namdars’ will be recovered. Not a single big loan defaulter was given loan by the NDA government…When we came to power in 2014, this started getting exposed. Then we asked banks to do a correct assessment of how much amount was stuck due to such loans,” Modi said. Phone banking by Congress had hurt economy, banks lent crores of rupees to businessmen on just one call, he added. With the launch of the IPPB, postmen will act as bankers for the rural population, long deprived of banking facilities. 

Modi also stressed on the steps taken by the government, including setting up of the bankruptcy board and the National Company Law Tribunal (NCLT) to crack down on shell companies and tackle rising non-performing assets.

With today’s launch, 650 branches and 3,250 access points of the India Post Payments Bank have gone live. IPPB will deploy around 300,000 postmen and ‘gramin dak sewaks’ carrying mobile phones and biometric devices to offer doorstep banking to customers, mainly in rural areas. By December, all 155,000 post offices in the country are likely to be linked to the IPPB system. This will also step up the number of rural bank branches in India significantly.

“For the launch, more than 800,000 man hours have gone into training 15,000 people, out of which 11,000 will be providing banking services at the doorstep. By the end of the year, all 300,000 people will be up and running,” IPPB Managing Director and Chief Executive Officer Suresh Sethi said in an interview earlier.

IPPB has been incorporated as a public sector company under the Department of Posts with 100% government equity and is governed by the Reserve Bank of India.

IPPB will offer a range of products such as savings and current accounts, money transfer, direct benefit transfer, bill and utility payments and enterprise and merchant payments. Customers will be able to access these products and related services across various channels — counter services, micro-ATM, mobile banking app, text messages and phone calls.

The bank will offer quick response (QR) cards to customers as an additional service, along with mobile banking, phone banking and SMS banking. The QR card will have the customer’s account number embedded and the customer does not have to remember his/her account number to access the account, according to Sethi.

IPPB has also partnered with different financial organisations to provide loans, investments and insurance products.

On Wednesday, the government decided to raise the outlay for bank by about 80% to Rs 1,435 crore from the current Rs 800 crore. The increase is meant to cover costs relating to technology and manpower, according to a government statement.

A payments bank is a differentiated bank providing a limited range of products, such as acceptance of demand deposits and remittance of funds. It can accept deposits up to Rs 1 lakh per customer. However, these banks cannot issue loans and credit cards. Other payments banks that have started operations are Airtel Payments Bank Ltd, Paytm Payments Bank Ltd and Fino Payments Bank Ltd.

 

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