NEW DELHI: India Post Payments Bank (IPPB) today kicked off its operations by rolling out pilot services in Raipur and Ranchi The bank will offer an interest rate of 4.5 per cent on deposits up to Rs 25,000; 5 per cent on deposits of Rs 25,000-50,000 and 5.5 per cent on Rs 50,000-1,00,000, its Chief Executive Officer A P Singh said.The paid up equity of the new bank is Rs 800 crore, of which the government has already infused Rs 275 crore, he added. "The idea is to have a branch in every district and make 3 lakh postmen come alive in payment bank function," he said.Also 1,000 ATMs of India Post will be transferred to IPPB, Singh added.Telecom Minister Manoj Sinha said that IPPB plans to have 650 branches across the country by September 2017.Terming IPPB as a mechanism for financial inclusion and a milestone, Sinha said the payments bank -- the third one to get a permit after Airtel and Paytm and the first one promoted by the government -- will not just conduct business but also serve people India Post Payments Bank is the third entity to receive payments bank permit after Airtel and Paytm. Payments banks can accept deposits up to Rs 1 lakh per account from individuals and small businesses.The new model of banking allows mobile firms, super market chains and others to cater to banking requirements of individuals and small businesses. It will be set up as a differentiated bank and will confine its activities to acceptance of demand deposits, remittance services, Internet banking and other specified services.In 2015, RBI had granted 'in-principle' approval to 11 entities, including the Department of Posts, to set up payments banks and proposed to give such licences 'on tap' basis in future.However, a consortium of Sun Pharmaceutical Industries promoter Dilip Shanghvi, IDFC Bank and Telenor Financial Services gave up their plans to roll out payments bank.Cholamandalam Investment and Finance Company Ltd (Chola) also decided to withdraw its plans to set up a payments bank. Other players are -- Aditya Birla Nuvo , Fino PayTech, National Securities Depository, Reliance Industries and Vodafonem-pesa.

Source: Economic Times January 30, 2017 13:52 UTC