India Post Payments Bank

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1.1 In the Budget 2015-16 speech in the Parliament, the Hon’ble Finance Minister announced the Government’s intention to set up the Payments Bank by Department of Posts to promote financial inclusion and ease access of the people to the formal financial system. The Department of Posts has received ‘In Principle’ approval from RBI on 7th Sept, 2015 for setting up of a Payments Bank.

1.2 The Payments Bank will be set up on a lean operating model. It will focus on financial inclusion by harnessing low-cost technology based solutions to extend access to formal banking especially in rural areas and among unbanked and under banked segments of the society.

1.3 The main objectives of the India Post Payments Bank will be to bring a large number of individuals and small businesses into formal banking channel by facilitating

 Demand Deposits - Savings account of upto Rs. 1 lac and

- Current Accounts with special focus on MSMEs, Small entrepreneurs / merchants, Village Panchayats, SHGs etc.

·         Direct Benefits Transfer (DBT) of social security payments of various Ministries to beneficiaries.

·         Utility bill payments for electricity, water, telephone, gas etc.

·         Payments of various Central and State Govt & Municipal dues and fees of various Universities / Educational institutions.

·         Person to Person remittances both domestic and cross-border with special focus on migrant labourers, low income households.

·         Distribution of third party financial products such as insurance, mutual funds, Pension & credit products.

1.4 Present status:

The Department of posts is seeking necessary Governmental approvals and preparing an implementation plan to set up the payments bank.