India Post Payments Bank – the common man’s banking partner

Almost 6.5 lakh transactions were done through India Post Payments Bank (IPPB) till March 31, 2020 during the lockdown after the Covid-19 outbreak. Another 34 lakh transactions were effected through the Post Office Savings Bank (POSB) during this period. The Ministry of Communications shared these figures, adding that around 2 lakh accountable mails, including speed post registered letters, parcels and money-orders were delivered during these trying times.

This spectacular performance by IPPB at a time when most last-mile delivery operations came to a standstill across the nation is indeed laudable. What is even more appreciable is that IPPB has added 1 crore users in August 2019 – with all these customers being on-boarded since March 2019. Moreover, IPPB garnered over two crore customers within two years of starting its operations in 2018.

While announcing this milestone, Ravi Shankar Prasad, Union Minister for communications, electronics & IT, and law & justice had said, “The success of IPPB’s business model underlines the government’s intent in creating an interoperable banking infrastructure for the public good contributing toward changing the financial inclusion landscape in India.”

On an average, IPPB has been opening or maintaining a run rate of 33 lakh accounts per quarter. It has been able to maintain this impressive pace by enabling more than 1.36 lakh post offices and empowering 1.9 lakh postmen. Since majority of these operate in tier two and three cities, they are able to provide a comprehensive collection of banking services to the doorsteps of the underbanked and unbanked masses in rural and semi-urban towns.

To close this loop in last-mile connectivity, and include more Indians under the financial inclusion mission, the government launched Aadhaar Enabled Payment System (AePS) Services in September 2019. This system allows any individual to perform basic banking services after linking their bank account to their Aadhaar. So, irrespective of the bank that manages their account, they could withdraw cash, enquire about the balance, transfer funds and pay utility bills with greater ease.

AePS’ rollout catapulted IPPB into one of the largest providers of interoperable banking services to customers of any bank in the country. To complete basic financial transactions, customers simply had to authenticate their identity with fingerprint scan and Aadhaar authentication.

Prasad noted that this real-world approach towards digital banking has helped increase rural banking infrastructure by almost 2.5 times, and brought more Indians into the ambit of financial inclusion. An official statement noted that IPPB has implemented one of the largest-ever digital financial literacy programme by investing over one crore man-hours in training and certifying more than 250,000 postal assistants, postmen and GDS (Gramin Dak Sevak) as banking service providers. IPPB also digitised most post office counters to accept electronic payments and enable direct payments into various postal products and saving schemes.