India Post Will Become India’s Biggest Bank; 34 Cr Users To Get Digital Banking Services!
India Post Payments Bank (IPPB) will be launched this year with full-fledged services.
The 164 years old India Post, which is Govt. of India’s official postal system, and hailed as one of the largest distributed postal systems in the world, will soon transform into India’s largest banking network.
Two very interesting developments have taken place which will elevate India Post to not only embrace digital banking operations on a massive scale but also become the largest bank in terms of branches and penetration.
India Post Payments Bank To Merge With Postal Network
As per a recent decision made by Ministry of Finance, India Post Payments Bank will now merge with the massive network of 1.5 lakh post offices, across India.
This will make India Post India’s largest banking network. SBI, which is currently India’s largest bank has around 29,000 branches, and 59,000 ATMs.
Last year, we had reported about India Post becoming India’s largest bank, with the introduction of their Payments Bank. However, red tape and bureaucracy were preventing them.
This is how: India Post Payments Bank (IPPB), which is expected to be launched this year with full-fledged services, comes under RBI, and India Post and their existing saving account services comes under Finance Ministry.
Now, Govt. has approved the linking of these two, which will merge to become India’s largest banking network. Every one of the 1.5 lakh post offices across India will now work as a bank branch for India Post. 1.3 lakh of these branches are in rural areas.
This is a big moment for the rural inclusion of financial services in India. A landmark moment.
34 Crore Saving A/C Users To Get Digital Banking
Meanwhile, as India Post Payments Bank and India Post Offices will merge, around 34 crores existing India Post saving account users will be able to access full-fledged digital banking services.
This includes NEFT, RTGS, Internet banking, instant money transfer and more, which any other banking customers typically does. Besides, the ATM card issues can be used for purchasing products online, paying to grocery etc.
Out of 34 crore India Post saving account customers, 17 crore are those who use saving accounts, and the rest are using monthly income schemes.
As of now, India Post starts to launch 650 Payments Bank branches, but soon, all 1.5 lakh post offices would become a bank branch, thereby diluting the difference between a post office and a bank branch.
Note here: It won’t be compulsory to convert into a payments bank account, for India Post’s saving account holder. An option would be provided, and if the user is not interested, he or she may continue using post office’s saving account.