The Finance Minister Arun Jaitley launched India Post Payments Bank on Monday. Pilot branches will be opened at Raipur and Ranchi. The bank will be a Public limited company entirely owned by government of India under Department of Posts.
"Payment Banks can pose challenge to traditional banks due to lower cost," said Arun Jaitley.
India Post Payments Bank to offer 4.5% interest on deposits up to Rs 25,000, 5% on Rs 25,000-50,000, 5.5% on Rs 50,000-1,00,000.
There are plans to open 650 branches in each district headquarters. 1.55 lakhs post offices to be mapped to postal bank. Its motto is "no customer is too small, no transaction too insignificant & no deposit too little."
The bank will be offering basic financial services, social security payments, utility bill payments, person to person remittances, current & saving accounts up to Rs 1 lakh and distibution of financial products (insurance, pension).
The India Post Payments Bank was in priniciple approval by RBI on 19th Aug 2015. It got cabinet approval on 1 June 2016. The bank got final license from RBI on 20th Jan 2017.