Cabinet okays 80% spending hike for India Post Payments Bank

New Delhi: The Union Cabinet on Wednesday approved an additional Rs 635 crore for setting up of India Post Payments Bank (IPPB), slated for a nationwide launch by Prime Minister Narendra Modi on September 1.

The additional outlay raises the investment amount by 80 per cent to Rs 1,435 crore.

“The additional sum of Rs 635 crore in the revised cost estimates is on account of Rs 400 crore for technology costs and Rs 235 crore for human resource costs,” the Ministry of Communications said in a statement.

The IPPB services will be available at 650 of its branches at district level and 3,250 access points from September 1. By December, the access points will be available at all 1.55 lakh post offices.

“The project will generate new employment opportunity for about 3,500 skilled banking professionals and other entities engaged in propagating financial literacy across the country,” the statement said.

The Ministry aims to provide accessible and affordable banking services to unbanked and underbanked population through doorstep banking to promote financial inclusion and “less cash” economy.

The postal bank will offer savings and current accounts, money transfer, direct benefit transfers, bill and utility payments, and enterprise and merchant payments. The products and services will be offered across multiple channels — counter services, micro-ATM, mobile banking app, SMS and IVR.

IPPB will pay incentive or commission to the last mile agents (postal staff and Gramin Dak Sewaks) directly in their accounts for providing IPPB services to motivate them to promote IPPB digital services to the customers, the Ministry said.

A part of commission to be paid by IPPB to Department of Posts, will be used for upgrading the infrastructure of post offices, it added.