India Post Bank is likely to tap World War-era tech to garner business
It
is back to basics for India Post Payments Bank (IPPB). It is tapping
into World War-era phone-based technology and its vast network of the
postman to target a customer base of around 850 million, which either
have no access to telephony or still depend on feature phones. It is
back to basics for India Post Payments Bank (IPPB). It is tapping into
World War-era phone-based technology and its vast network of the postman
to target a customer base of around 850 million, which either have no
access to telephony or still depend on feature phones. Unlike
full-fledged banks, payments banks can accept deposits up to Rs 1lakh
and have to mandatorily park 75% of funds in government bonds.They are
not allowed to offer loans either. With
its network of over 1.5 post offices, IPPB is seen to be a major
competitor for banks, especially in rural areas and small towns. The
bank, floated by India Post, is running behind schedule as it is yet to
tie up with a technology vendor for its banking services. But it is
still targeting 2 crore customers in the first year with the business of
around Rs 450 crore.By the fifth year, the bank hopes to have eight
crore customers with a business of Rs 2,500 crore. A key focus
area for IPPB is one billion bills that are paid every month, with the
average ticket size being Rs 300. This is where Giro -an electronic fund
transfer tool used in Europe and Japan -will come in handy. Apart from
helping customers settle bills, a worker in a city can add his wife or
mother as a beneficiary and transfer funds into their accounts by
issuing instructions to a call centre. The wife or the mother will then
use Aadhaar based authentication to withdraw funds either at a post
office or ask a postman to deliver cash at home, for which a small fee
may be levied.
IPPB is also in talks with the rural
development ministry for accessing details of NREGA beneficiaries and
pensioners getting funds under the National Social Assistance
Programme.Again, idea is to make the payments Aadhaar-based
to minimise leakages.
Source: -The Economic Times.
