Across the country, over 350,000 postmen are offering doorstep financial services to people in even the remotest parts of India.
They are equipped with a mobile phone and a hand-held biometric scanner to perform tasks of bankers including opening savings accounts, transferring money, paying utility bills, topup mobile phone, accepting cash deposits, and facilitating withdrawals.
These have been trained and certified to provide banking services as well as to promote financial literacy in rural areas, and are being given monetary incentives for both assisted and self-service transactions.
Powered by India’s Post Payment Bank
This innovative model was made possible by the India Post Payment Bank (IPPB), a 100% government owned public limited company under the Department of Post and was launched by India’s prime minister, Narendra Modi
IPPB aims to utilize all of India’s over 155,000 post offices, including the 139,000 ones located in rural areas, as access points and 350,000 postal postmen to provide house to house banking services with the goal of making banking easy, convenient and accessible to ordinary citizens. At launch, IPPB had 650 branches and 3,250 access points across the country.
IPPB is a so-called “payments bank,” and basically operates like any standard bank except that it operates at a smaller scale. IPPB cannot issue credit cards and cannot lend directly, although it can act as a banking correspondent to other banks to provide credit in rural areas.
Products and services currently provided by IPPB include current and savings accounts, QR code payments, insurance products through third parties, as well as fund transfer services through the Unified Payments Interface, the Immediate Payment Service, the National Electronic Fund Transfer, and the Real Time Gross Settlement.
In addition to services provided house to house by postmen, customers can also use the IPPB mobile app to make digital transactions for various financial services. Other channels through which it operates include micro-ATM, SME and interactive voice response (IVR).
As of July, IPPB had rolled out 135,000 access points in post offices across the country with 20,000 post offices awaiting connection. About 110,000 of these access points are located in the rural areas, according to Connected to India.
There are currently 180 million savings bank accounts provided by India’s 155,000 post offices. These are computer-linked with the IPPB’s 650 branches, making it the largest banking network in the country. All of India’s regular banks combined currently make up for only 50,000 branches.
An immediate success
Since its launch less than a year ago, IPPB has seen over 4 million customers opening savings accounts, and almost 200,000 Post Office Savings Account holders have linked their old post office accounts with IPPB.
The IPPB Mobile Banking app has been downloaded by over one million people, and customers have so far made over 3 million transactions worth more than Rs 1 billion (US$14 million). More than 200,000 bill payments have also been processed by IPPB.
Moving forward, IPPB plans to further widen financial inclusion coverage, notably by introducing new “smart services” through neighborhood outlets.
“We have submitted a prototype of smart post offices which can run like ATM machines. People can transact and avail an array of postal facilities instantly and without hassles,” K Alagesan, chairman of Indian Telephone Industries (ITI) Limited told ETTelecom earlier this week.
ITI is currently awaiting approval from the DoP.
SOURCE: FINTECH NEWS SINGAPORE