Government has allocated Rs 500 crore to India Post Payments Bank for financial year 2017-18 as it gears up to set up 650 branches across country by September 2017.
#DigitalErra Thought Corner
Government has allocated Rs 125 crore as “capital infusion into corporate entity for India Post Payments Bank” and Rs 375 crore as “grant in aid to India Post Payments Bank (IPPB)”, as per Output-Outcome Framework for Schemes 2017-18 for the Department of Posts released today.
Today, let us look into some of the top payments banks in the country and their services.
What are the offerings of these payment banks?
India Post Payment Bank
- The IPPB will offer an interest rate of 4.5 per cent on deposits up to Rs 25,000; 5 per cent on deposits of Rs 25,000-50,000 and 5.5 per cent on Rs 50,000-1,00,000.
- The total paid up equity of the new bank IPPB is Rs 800 crore, of which the government has already infused Rs 275 crore.
- “Something that others are not doing but might emerge as our USP is door-to-door banking with the help of the postman,” Says IndiaPost CEO Ashok Pal Singh.
- Simplified payment solutions for the masses both for feature phone users as well as around 350 million who are without any phone at all.
Airtel Payments Bank
- Airtel Payments Bank is giving a 7.25% interest on savings accounts, which makes it the highest interest rate on offer.
- It is offering free money transfer from Airtel to Airtel numbers within Airtel Bank, money transfer to any bank account in the country. With the launch, over 250,000 Airtel retail stores across the country would double up as banking points. The plan is to scale up to 600,000 banking points by the end of the year.
- The company had said it would develop a nationwide merchant ecosystem of over five million partners including small kirana stores, grocers, pharmacies, restaurants, etc. These merchant partners will accept digital payments from Airtel Payments Bank customers over mobile phones. The platform that will connect 100 million Airtel customers, is aiming to add 25,000 accounts per week.
- Self-declared merchants can now accept up to Rs 50,000 directly in their bank accounts.
- Fingerprints can be set as Paytm password
- Adding money faster through a single-screen
- Pay by scanning the recipient’s Paytm QR Codes from their phone’s image gallery
- Queries can be addressed on the Paytm Community Forums
So, what’s the idea behind payments bank expansion?
The Reserve Bank of India main objective behind payments banks is to achieve financial inclusion of millions of people, particularly in the remote areas of the country. It is to serve the need of transaction and savings account in rural areas. But with transfer and withdrawing charges so high, it might not attain the desired purpose. So, in 2015, the Reserve Bank of India gave approval to 11 applicants including Paytm to set up these banks.
Reach of Payments banks is sure going to be more than the number of bank branches in the country but unsustainable rates and high cost of transaction should not be deterrent in its expansion. Post demonetization, there has been a seamless transition to cashless economy and payments banks will further drive m-commerce and digital payment transactions.