India Post Payments Bank (IPPB)

About India Post Payments Bank (IPPB):

• IPPB has been established under the Department of Posts, Ministry of Communication, with 100% equity owned by the Government of India.
• IPPB was launched on September 1, 2018, aimed at making banking services available at people’s doorstep.
• Mandate: To remove barriers for the unbanked and under-banked and reach the last mile, leveraging a network comprising 160,000 post offices (145,000 in rural areas) and 400,000 postal employees.
• Headquarters: New Delhi
• Functions:
  • The operations of IPPB will be on a smaller scale as compared to other banks and will not advance loans or issue credit cards to avoid risk. 
  • It will accept deposits, offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third-party fund transfers. 
  • It will accept deposits upto Rs 2 lakh, beyond which the account will be automatically converted into a post office savings account.
  • The products and services of the bank will be made available through various mediums such as counter services, micro ATMs, mobile banking apps, messages, and interactive voice responses.
  • The IPPB will use Aadhaar to open accounts, and a QR card and biometrics will be used for authentication, transactions, and payments.

What are Payments Banks?

• A payments bank is like any other bank but operates on a smaller scale without involving any credit risk. 
• It was set up on the recommendations of the Nachiket Mor Committee.
• Objective: Widen the spread of payment and financial services to small businesses, low-income households, and migrant labor workforce in a secured technology-driven environment.
• They are registered under the Companies Act 2013 but are governed by a host of legislations such as the Banking Regulation Act, 1949; RBI Act, 1934; Foreign Exchange Management Act, 1999, etc.
• It needs to have a minimum paid-up capital of Rs. 100,00,00,000.
• Activities that can be performed:
  • It can take deposits up to Rs. 2,00,000. It can accept demand deposits in the form of savings and current accounts.
  • The money received as deposits can be invested in secure government securities only in the form of Statutory Liquidity Ratio (SLR). This must amount to 75% of the demand deposit balance.
  • The remaining 25% is to be placed as time deposits with other scheduled commercial banks.
  • It can offer remittance services, mobile ayments/transfers/purchases, and other banking services like ATM/debit cards, net banking, and third-party fund transfers.
• Activities that can be performed:
  • It cannot issue loans and credit cards.
  • It cannot accept time deposits or NRI deposits.
  • It cannot set up subsidiaries to undertake non-banking financial activities.

Q1) What is the Press Information Bureau (PIB)? 

Press Information Bureau (PIB) is the nodal agency of the Government of India to disseminate information to the print and electronic media on government policies, programmes, initiatives and achievements. It functions as an interface between the government and media & also serves to provide feedback to the government on people’s reaction as reflected in the media.

Source: India Post Payments Bank Accounts To Be Blocked If PAN Card Not Updated? PIB Clarifies