In order to achieve the financial inclusion objective of the government, the India Post Payments Bank was formally launched on September 1, 2018, which will now enable the familiar and friendly “dak babu” (postman) to open a bank account at the very doorstep of people. The postman will need a mobile phone, a fingerprint scanner, and a little training to be fully equipped to provide day-to-day banking and post office services.
The IPPB initiative will enable micro enterprises to come on board for digital transactions, who face multiple challenges in using digital payment solutions, according to RS Sharma, Chairman, TRAI. “These merchants largely operate in the informal economy, their literacy levels are low and they operate on a small scale. They have multiple challenges in using digital payment solutions. They also have difficulties collecting dues from customers and lack working capital for, or access to, institutional credit mechanisms. They do, however, have a significant cash footprint,” RS Sharma wrote in the Indian Express.
“Together with the revamped GST, UPI 2.0 interface, and the RBI’s Public Credit Registry (PCR), the IPPB can provide credit-worthiness data and thus remedy the lack of access to credit to these entities. This could be a game changer for a large number of micro-enterprises and the lives they touch,” Sharma wrote in his article “Dak babu as bank-teller.” Sharma also said the IPPB could be one of the final pieces in the jigsaw of financial inclusion for the entire country.
The India Post Payments Bank (IPPB) was set up under the Department of Posts, Ministry of Communication, and formally launched by Prime Minister Narendra Modi on September 1, 2018. The IPPB started off with 650 branches in addition to 3,250 access points in post offices and is set to spread its footprint to 1.55 lakh access points by December 2018. “This move has created the country’s largest banking network with direct presence at the village level,” Sharma wrote.
The familiar and friendly “dak babu”, he wrote, shall now be the bank-teller who will be at the doorstep of senior citizens, homemakers, small businesses, rural influencers like teachers, paramedics and local representatives, urban migrants, kirana stores, farmers, DBT beneficiaries and students. “Just as the State Bank of India brought banking and credit to the people in a big way in the 1950s, the IPPB can bring similar services (now with digital payments facility) to the people who have not had access to these services,” Sharma added.