Cabinet approves additional funds of ₹820 crore for India Post Payments Bank

Cabinet also granted in-principle approval for future fund infusion to the tune of ₹500 crore for meeting regulatory requirements, technological upgradation

The Union Cabinet on Wednesday approved additional funding of ₹820 crore for setting up of India Post Payments Bank (IPPB) branches for FY21 to FY23, taking the total outlay to ₹2,255 crore.

The Cabinet “has approved the revision of project outlay for setting up of IPPB from ₹1,435 crore to ₹2,255 crore as equity infusion to meet regulatory requirement,” according to an official statement said, adding that the Cabinet had also granted in-principle approval for future fund infusion to the tune of ₹500 crore for meeting regulatory requirements and technological upgradation.

The objective of the project, the government said, was to build the most accessible, affordable and trusted bank for the common man; spearhead the financial inclusion agenda by removing the barriers for the unbanked and reduce the opportunity cost for the under-banked populace through assisted doorstep banking.

The India Post Payments Bank was introduced on September 1, 2018, with 650 branches/controlling offices. Since then, it has opened more than 5.25 crore accounts accounting for 82 crore aggregate number of financial transactions, with ₹1,61,811 crore, which includes 765 lakh AePS transactions worth ₹21,343 crore.

“Out of the 5 crore accounts, 77% of accounts are opened in rural areas, 48% are women customers with around ₹1,000 crore of deposit. Nearly 40 lakh women customers received Direct Benefit Transfer (DBT) into their accounts valued at ₹2,500 crore. More than 7.8 lakh accounts have been opened for school students,” as per the statement.

In Aspirational Districts, IPPB has opened about 95.71 lakh accounts having 602 lakh aggregate transactions worth ₹19,487 crore, while in Left Wing Extremism (LWE) districts, 67.20 lakh accounts have been opened by IPPB having 426 lakh aggregate transactions worth ₹13,460 crore.