Launched by PM Modi in September 2018, the India Post Payments Bank is touted to be the biggest bank in the making. Let’s find out more.
In recent years, India has witnessed tumultuous changes in the payments landscape as more and more people have been switching to non-cash payment methods. Demonetisation offered a fillip to customers to shift to non-cash payment methods. Growth in digital payments has been facilitated by an increase in merchant outlets that accept such payments. And proliferation of UPI has made transferring money across bank accounts hassle-free. The number of UPI transactions hovered around 250 million in June 2018.
According to a report by Euromonitor International, the proportion of cash transactions in the total consumer spending in the country has dropped from 78% in 2015 to 68% in 2017. Taking a note of the writing on the wall, India Post launched its much-awaited payments bank in September this year (2018) by opening 650 branches across the country. Touted to be the biggest bank in the making, the Indian government holds 100% equity in this payments bank. Read on to know more.
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What is the India Post Payments Bank (IPPB)?
The IPPB is a public-sector company under the Department of Posts and Ministry of Communication and offers a host of services like Savings Account, Current Account, utility and bill payments, loans, Insurance and Mutual Funds. The bank is governed by the RBI and will be linked to all the 1.55 lakh post offices in the country by December 31, 2018. The managing director and chief executive of the bank is Suresh Sethi. The aim of the IPPB is to improve rural access to banking and financial services, and bring them on par with the kind of services that are made available to the urban segment. Some of the services that the bank would be offering are listed below:
- Banking Services – Savings and Current Account, Loans and Deposits
- Mutual Funds
- Insurance
- Domestic Remittance Service
- Direct Benefit Transfer
- Doorstep Banking
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IPPB Savings Account: Features and charges
The IPPB offers the following types of Savings Accounts for customers:
- Regular account – Safal Account
- Basic Savings Bank Deposit Account (BSBDA) – Sugam Account
- BSBDA Small – Saral Account
- Digital Savings Account
You can open the digital account through the IPPB mobile app, but the remaining can be opened either through the post office or the postman only. One of the best things about these Savings Accounts is that they come without the requirement of maintaining a minimum balance. They are zero-balance accounts.
| Features | Regular Account – Safal Account | Basic Savings Bank Deposit Account (BSBDA) | BSBDA Small – Saral Account | Digital Savings Account |
| Age | Anyone 10 years and above with KYC | Anyone 10 years and above with KYC | Anyone 10 years and above with simplified KYC | Anyone 18 years and above with simplified KYC |
| Minimum deposit amount | ₹ 100 | Nil | Nil | Nil |
| Minimum account balance | Nil | Nil | Nil | Nil |
| Maximum account balance | ₹ 1,00,000 | ₹ 1,00,000 | ₹ 50,000 | ₹ 2,00,000 |
| Annual rate of interest | 4% | 4% | 4% | 4% |
| ATM/Debit Card | Free | Free | Free | NA |
| Mobile alerts | Free | Free | Free | Free |
| Free monthly transactions | 4 | 4 | 4 | NA |
| Maximum ATM withdrawal | ₹ 25,000 | ₹ 25,000 | ₹ 10,000 | NA |
| Nomination facility | Available | Available | Available | NA |
| Annual maintenance charges (From 2nd year) | ₹ 100 | NA | NA | NA |
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Minimum/maximum balance rules
IPPB Savings Accounts are zero-balance accounts, so there are no minimum balance rules. However, RBI rules for maximum balance for payments banks will hold true here. As per RBI mandate, all payments bank account holders cannot hold more than Rs. 1 lakh in any account at any given point of time. So, any transaction after your account balance reaches the Rs. 1 lakh mark will be cancelled automatically.
If it gets too complicated for you, the IPPB has an easy solution for this too. If you open a post office Savings Account and link it to your IPPB account, any amount in excess of Rs. 1 lakh will be transferred to your post office account which is a regular savings bank account.
Interest rate on IPPB account
IPPB accounts offer you an interest rate of 4% and come with no caps on the number of transactions. The interest is calculated on your daily closing balance and is paid out quarterly.
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Deposit/withdrawal rules
You can withdraw or deposit as many times as you want for regular and digital savings accounts. Your monthly cash withdrawals are also capped at 4 for a basic Savings Account. In order to make cash deposits and withdrawals, you will need to go to the nearest post office where IPPB service is available. You also won’t be able to make cash withdrawals from ATMs as IPPB accounts don’t come with an ATM card.
Tie up with PNB Metlife and Bajaj Allianz:
IPPB has tied up with PNB Metlife and Bajaj Allianz for its insurance offerings and has plans of entering into more financial service partnerships to expand its basket of offerings like loans and Mutual Funds. Additionally, IPPB offers facilities like Domestic Remittance Services whereby customers can transfer funds via domestic remittance methods in a secure manner, and Direct Benefit Transfer (DBT) where account holders will directly get subsidies transferred to their bank accounts.
Not just payments, now you can even avail a Credit Card, Personal Loan or even make an investment in Mutual Funds or Fixed Deposits online without compromising the security of your private data. It’s safe and totally hassle-free! Give it a go by clicking the link below.