Government proposes IPPB bank account services for absolute financial inclusion

Prime Minister Narendra Modi asserts that the accessibility of IPPB bank (Indian Post Payments Bank) will aid the services to reach the remotest places in the country.

IPPB is set up to alleviate the poorest section of the society by making them a part of the  Indian economy. It’s also defined as an extended version of Jan Dhan Yojana by the government. (Rolled out in 2014, aimed at expanding and making financial services affordable for the unorganized sector)

Importance in the rural economy

IPPB bank account services’ last mile reach through its massive network of access points and trust instilled in post master by the rural population would help boost the rural economy. This makes it the preferred banking partner for various subsidy transfers of central and state government schemes.

Prime Minister added that there are over 1.5 lakh post offices and over 3 lakh postmen who are connected to the people of the country. Now they shall be empowered with smartphones and digital devices to provide assisted banking services.

IPPB would function like any other banks without involving any credit risks. It will carry out most banking operations like accepting deposits but wouldn’t issue loans or credit cards. The payments bank will accept deposits up to 1 lakh, offer mobile payment transfers, ATM/ debit cards, net banking and third party transfers.

Aadhar playing a significant part

Importance given to Aadhar by the current government is evident through this recent development as well. IPPB will utilize Aadhar to open accounts, while a QR code and biometrics will drive authentication, transactions and payments (All to be carried out by Postmen).

There is no necessity to maintain the minimum balance and the bank will offer 4% interest rate on savings account.