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 plus its vast network of postman to target a customer base of around 850 million, which either have no access to telephony or still depend on feature phones.

Payment banks can accept deposits up to Rs 1 lakh and have to transfer 75% of funds in government bonds.They are not allowed to offer loans either.

The bank, floated by India Post, is running behind schedule as it is yet to tie up by means of a technology vendor for its banking services. But it is still targeting 2 crore customers in the first year by means of business of around Rs 450 crore. By the fifth year, the bank hopes to have eight crore customers by means of a business of Rs 2,500 crore.

A key focus area for IPPB is one billion bills that are paid every month, by means of the average ticket size being Rs 300. This is where Giro — an electronic fund transfer tool used in Europe plus Japan — will come in handy.The wife or the mother will then use Aadhaar based authentication to by means of draw funds either at a post office or ask a postman to deliver cash at home, for which a small fee may be levied.

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While apps to compete by means of PayTM plus Airtel Payments Bank are also planned, IPPB may not offer credit card to its customers. “My market is going to be very large in the feature phone plus those by means ofout phones,” said an officer.

He added that those by means of some savings will also have the option to buy from a simple portfolio of insurance plus mutual funds. Unlike banks, which hawk complex products, IPPB intends to confine itself to term assurance plans from all the companies plus plain vanilla index funds for equities plus a debt plan. “We do not want to be accused of mis-selling plus therefore want to keep it simple. If someone wants an annuity plan or money back, he or she can go to an agent or a company,” the officer said.


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