New Delhi: India Post Payments Bank (IPPB) will press into service postmen equipped with smartphones to go door to door and will open 3,250 customer access points across 650 districts when it launches operations in March, seeking to cater largely to under-banked rural areas.
The bank will leverage the 155,000 technologically upgraded post offices, of which 129,000 are in rural areas, as well as the existing customer base of India Post, Anant Narayan Nanda, secretary, department of posts, and chairman of IPPB, said in an interview.
A special dispensation from the Reserve Bank of India (RBI) will enable the payments bank to link accounts of existing post office savings bank customers and let them access both on the same screen and perform transactions.
According to Nanda, this will give a huge fillip to existing customers. India Post has around 170 million savings bank accounts.
“By December 2018, 2 lakh postmen and gramin dak sewaks carrying mobile phones will offer doorstep banking to customers predominantly in rural areas. Eventually, this number will increase to 3.5 lakh,” Nanda said.
The bank plans to start with 3,250 access points—five each in 650 districts—and scale up the number every month. It will employ 3,000 people—roughly half the staff will be on deputation from state-run banks and India Post.
The bank is in the process of training postmen to carry out basic banking facilities such as opening bank accounts and conducting transactions on the mobile phone. Besides assisting customers, the postmen will also teach them how to perform transactions on their own. They will receive monetary incentives for both assisted and eventually self-service transactions.
Customers will be able to access a range of services including net banking, National Electronic Funds Transfer (NEFT), Real-time Gross Settlement (RTGS) and Immediate Payment Service (IMPS). They will be able to pay utility bills, invest in mutual funds and buy insurance products on the app.
The gramin dak sevaks and postmen will be trained by banking institutions. An internal survey by the department showed that between 70% and 80% of postmen use smartphones for personal use and are active on social networking sites and should be able to use the app with ease, Nanda said.
At present, the post office accepts payments of around Rs46,000 crore in cash every year. With the entire network moving towards accepting digital payments, a significant portion of this amount could be handled by the banking network, an indication of the potential available for business.
IPPB is 100% owned by India Post; it received a payments bank license from RBI in January 2017 and has begun operations on a pilot basis in Jharkhand and Chhattisgarh.
India has three other operational payment banks—Airtel Payments Bank, Paytm Payments Bank and Fino Payments Bank.
“India Post does have the largest reach in the rural parts of the country and the idea of financial inclusion through postmen seems very promising,” said Ashish Aggarwal, a consultant at the National Institute of Public Finance and Policy. “However, the execution has to be well done to have mass impact. The postmen need to be well-trained and equipped as even basic banking involves much more than delivering courier (packages) and letters,” he added.