Introduction – Payments Banks- Payments bank is new model
of banking that allows mobile firms, supermarkets chains and others to cater
banking requirements of individuals and small business to further enhance
financial inclusion.
Payment banks can accept
deposits maximum up to 1,00,000 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 financial products,
mutual funds and Insurance products.
India Post Payments Bank
India's Post Payment Bank was
set up on 17th august 2016 under Companies Act, 2013 as a public
limited company with 100% government of India equity. It comes under the Department of Posts in Ministry
of Communication &Technology.
The intentions
It makes Department of Post’s
network as a resource to reach to remote areas where quality financial services
can be available at low-cost. It was the third entity to receive
payments bank permits after Airtel and Paytm.
The Purpose – The purpose is to further increase the
financial inclusion by providing basic banking remittance (money transfers
from abroad) services and payments services to customers. It will facilitate
access to financial services like insurance, pensions, mutual funds to
customers especially from rural areas and the unbanked and under-banked areas.
It will help to encourage
citizens to move forward towards cashless economy, and also it will create
awareness about banking and payments technology by generating new employment opportunities for
skilled banking professionals.
The working- There will around 11 thousand
Gramin Dak Sevak( ग्रामीण डाक सेवक) in rural area and postmen in urban area. These will provide doorstep banking services.
IPPB also has been permissioned to link around 170 million postal savings banks (PSB) account with its account. It will also carry out various transactions that will enable IPPB customers to transfer and receive money from any bank account to any other bank account.
IPPB also has been permissioned to link around 170 million postal savings banks (PSB) account with its account. It will also carry out various transactions that will enable IPPB customers to transfer and receive money from any bank account to any other bank account.
Challenges
Challenges also remain into picture as it is difficult to predict that Payment Banks can earn profit and survive alone in business environment.
Certain guidelines and regulations of RBI set boundaries for Payments Banks, which again remains a challenge.
Not much effect was on market after Airtel and Paytm launched their payment banks. Indian Post Payment Bank offers 4% to its saving account customer, and to generate revenue it has to charge money on financial transactions and other services.
Indian Post Payment Bank will also has to face competition as private entities are already in the market.
Conclusion
However, in spite of all challenges, the new payment bank can work wonder in the financial inclusion across rural India.
