Preparations for the commencement of operations of India Post Payments Bank, scheduled for next month, is in the final stages, communications minister Manoj Sinha said, adding that one branch will be opened nearly all districts of India.

“The preparatory works for roll out of 650 branches including the civil, electrical, branding and furniture are in final stages,” he said today. “The work for development of technology platform is in advanced stage.”

In addition to the 650 full-blown branches, the India Post Payments Bank will also have 1.55 lakh access points for collecting and disbursing money and other similar services.

These will be ready by September this year, Sinha added.

The technology work is being carried out with the help of two technology consultants HPGS and EIT Services India.

Meanwhile, employees — including those recruited especially for the bank and postal employees — are being trained at Indian Institute of Corporate Affairs (IICA), Gurgaon and various postal training centers across India, Sinha said.

Under the Payments Bank license granted in January last year, India Post can offer services such as savings bank, money transfers etc., but cannot take fixed deposits or give loans.

The bank will have nearly 1,000 ATMs on day 1, which will be increased to 5,000 over time, Sinha said.

Diversification into banking is seen as a natural growth opportunity for India Post, which has seen a decline in its core business of carrying letters and documents due to the emergence of electronic communication facilities and private couriers.

AFFORDABLE BANKING

India Post Payments Bank is widely anticipated as it promises to be India’s cheapest provider of banking services for many customers.

Unlike most banks, India Post Payments Bank will allow unlimited withdrawals of cash from its ATMs.

Most banks in India typically allow only five transactions free of charge from their ATM network and charge around Rs 23 per transaction after the limit.

In addition to the 1,000 in-house ATMs, India Post Bank has also tied up with Punjab National Bank to extend the facility of unlimited free ATM transactions per month to its customers.

India Post Payments Bank also has zero ‘minimum balance penalties’.

In comparison, India’s largest bank SBI charged its users Rs 1,771.67 crore over eight months for failing to maintain minimum balance in their accounts.

The India Post Payments Bank will give an interest of 5.5% on the balance kept by users in their accounts, compared to 4% offered by most banks. It will charge Rs 4 per IMPS transaction, while Aadhaar-enable Payment Service (AePS) transactions will be totally free.

The bank will also provide doorstep banking — including cash deposit and withdrawal — at a price of Rs 15 to 35 per visit, depending on the amount involved. The full list of charges is available here

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