Payments Bank Current Affairs - 2019
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India Post Payments Bank (IPPB) is expected to go live with 650 branches in addition to 3,250 access points co-located at post offices in August, 2018 following final clearance from Reserve Bank of India (RBI) to start. RBI has given approval to IPPB after testing its entire system.
IPPB was incorporated on August 17, 2016 under Companies Act, 2013 as a public limited company with 100% Government of India equity under Department of Posts (Ministry of Communication & Technology). It was the third entity to receive payments bank permit after Airtel and Paytm.
Around 11,000 gramin dak sevaks (in rural area) and postmen (in urban area) will provide doorstep banking services. IPPB also has been given permission to link around 170 million postal savings bank (PSB) account with its account. It will also carry out RTGS, NEFT, IMPS transaction that will enable IPPB customers to transfer and receive money from any bank account.
Payments bank is new model of banking allows mobile firms, supermarket chains and others to cater to banking requirements of individuals and small businesses to further enhance financial inclusion. It will be set up as differentiated bank and will confine its activities to acceptance of demand deposits, remittance services, internet banking and other specified services but cannot undertake lending services. Payments bank can accept deposits maximum up to Rs 100,000 per account from individuals and small businesses. They can issue ATM/debit cards but not credit cards and can also issue other prepaid payment instruments. They also can distribute non-risk sharing simple financial products like mutual funds and insurance products.
The Union Government has announced that India Post Payments Bank (IPPB) will become operational in all 650 districts of the country by April 2018 to facilitate financial inclusion.
These banks will be linked to 1.55 lakh rural post offices for its operations and carry out banking services. This will be largest banking network in the country. Two such banks are already operational in Ranchi (Jharkhand) and Raipur (Chhattisgarh).
India Post Payments Bank (IPPB)
IPPB has been set up as a Public Limited Company under Department of Posts with 100% Government of India (GOI) equity. It leverages DoP’s network, resources and reach to make low-cost, quality and simple financial services easily accessible to customers in the country.
Its purpose is to further cause of financial inclusion by providing basic banking, remittance services and payments services to customers. It will facilitate spread of financial services like insurance, pensions, mutual funds to customers especially from rural areas and the unbanked and under-banked segments.
It will also generate opportunities for propagating financial literacy across the country by using state of the art banking and payments technology. It will also generate new employment opportunities for skilled banking professionals. It will encourage citizens to move towards a cashless economy.
Payments banks are new model of banks conceptualised by Reserve Bank of India (RBI) to meet government’s financial inclusion target. They are being set up as differentiated bank and its activities are confined to acceptance of demand deposits, remittance services, internet banking and other specified services but not lending services.
This differentiated banking model allows mobile firms, supermarket chains and others to cater to banking requirements of individuals and small businesses.
Payments banks can accept deposits up to Rs. 1 lakh per account from individuals and small businesses. They can issue ATM/debit cards but not credit cards. They can also issue other prepaid payment instruments. They can also distribute non-risk sharing simple financial products like mutual funds and insurance products.