By Prarthana Mitra
The government announced that 1.55 lakh post offices around the country will soon be integrated with 650 payments banks, to strengthen digital banking services, especially in the rural areas.
Heres what happened
Following the launch of the postal insurance application that enables people to pay their insurance premium, Union Telecom and Railways Minister Manoj Sinha addressed the news of the impending integration on Wednesday.
Sinha added that 648 additional India Post Payments Bank (IPPB) will be set up and connected to rural post offices. Additionally, within the next five months 1.5 lakh more new banks will also be set up. He added IPPB branches will start functioning after technology vendors completes the work of operating the banking network.
Tech giant HP was given the contract last year to act as system integrator (SI) for the IPPB. The company has built the software for integrating various functions of the bank, pending RBIs approval. RBI approved the launch of commercial operations for eleven other entities including PayTm, Airtel, Jio and Fino Payments Bank last week.
Why you should care
Regarding the newly-launched ‘DARPAN-PLI’ or insurance app, Sinha said the insurance services revenue has increased by Rs 6 crore over the last four months. It makes it easier for rural people to pay their premiums after which their accounts are immediately updated and receipts generated.
The premiums and interests of post office insurance are considerably less, in comparison to those offered by the Life Insurance Corporation (LIC). The minister takes pride in the fact that the IPPB pays more bonus. We have opened Postal Life Insurance for professionals also, he said.
The financial inclusion of postal and banking system will usher in an era of full-fledged digital banking in the country, which has largely ignored the vast rural market until now. After successful pilot projects in Ranchi and Raipur, the fully implemented and integrated post payments system aims to reach at least 130 million Indians.
Within the next five months, expect your nearest post office to start doling out digital banking services.