India Post Payment Bank launched: What you need to know

With much fanfare, Prime Minister Modi inaugurated the Indian Post Payments Bank (IPPB) over the weekend. Leveraging the spread of post offices throughout the country, the government’s intention is to make banking facility available at the doorstep of citizens and leverage the workforce of 300,000 postmen.

With the postmen carrying hand-held devices that can capture a QR Code or biometric proof of ID, people can expect to withdraw cash at their place after opening an account at the nearest post office using their Aadhaar card. There will be 650 branches and 3,250 access points in all.

Here are the top features of the new payments bank:


 While IPPB will act as a bank, allowing accounts to be opened and deposits made and amounts withdrawn, customers cannot avail any loans nor can they expect to apply for credit cards. But for loans and other activities, there are tie-ups with PNB and Bajaj Allianz Life Insurance.

Limited Deposits

A customer can make deposits into the account but the total amount is limited to Rs 1 lakh. Other normal services offered by banks like payments and remittance services, mobile payments, transfers, purchases, ATM cards, net banking and third-party fund transfers will all be made available. Amounts deposited in excess of Rs 1 lakh will get automatically transferred to the savings bank account.

Interest rate

The interest on the IPPB savings account will be the same as what the banks offer, which is 4% per annum.


Post offices have been permitted to link the 17 crore postal savings accounts with the IPPB accounts.

As mentioned, the account opening will be through the Aadhaar card and transactions through the use of the QR Code or biometric ID. Postmen will carry the appropriate hardware for these. IPPB will be a 100% government owned entity.

Financial inclusion

According to RBI, some of the sections of the society that remains outside of the banking sector, like migrant labour, low income households will be benefitted through small savings accounts and payments and remittance services.

The government has allocated additional funds to meet the requirements of the operations of IPPB and for it to compete with private payments banks like Paytm and others.

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