Government of India
Cabinet
01-June-2016 19:44 IST
Cabinet approves setting up of India Post Payments Bank
The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra
Modi has given its approval for setting up the India Post Payments Bank
(IPPB) as a Public Limited Company under the Department of Posts, with
100% Government of India (GOI) equity.
The total expenditure involved in this project is Rs 800 Crore. All
citizens, especially 40% of the country's population that is outside the
ambit of formal banking in the country will benefit from this project.
The project will be rolled out in the entire country in a phased manner.
The IPPB will obtain banking licence from RBI by March 2017 and by
September 2017, its services will be available across the country
through 650 payments bank branches, linked post offices and alternative
channels riding on modern technology including mobiles, ATMs, PoS/ m-PoS
devices etc and simple digital payments.
The proposal will further the cause of financial inclusion by providing
basic banking, payments and remittance services and facilitate financial
services like insurance, mutual funds, pensions and access to credit in
tie-up with third party financial providers with special focus on rural
areas and the unbanked and under-banked segments. It will generate new
employment opportunities for skilled banking professionals and will
generate opportunities for propagating financial literacy across the
country. It will create the largest bank in the world in terms of
accessibility and in time, will encourage the move towards a less cash
economy.
Background
Setting-up of the IPPB to further financial inclusion was one of the
budgetary announcements during 2015-16. The Department of Posts had
obtained the "in-principle approval" of the RBI in September 2015 to set
up the India Post Payments Bank. The India Post Payments Bank will
leverage the Department’s network, reach, and resources to make simple,
low-cost, quality financial services easily accessible to customers all
over the country.
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