India Post Payments Bank wants to deliver banking services via postmen

Wearing a dusty khaki uniform, postmen travelled from valleys and mountains to deliver letters... but in this new role, he is going to help customers withdraw money from any bank. India Post Payments Bank, is leveraging the infrastructure and human capital of India Post and offering Banking as a service, BaaS. In an exclusive conversation with ETBFSI, Suresh Sethi, MD&CEO explains how IPPB wants to offer BaaS and illustrates the plan of how exactly postmen will offer doorstep service for the customers of all banks.

Amol Dethe
  • Updated On Feb 24, 2020 at 01:31 PM IST
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<p>Suresh Sehi, MD and CEO, India Post Payments Bank</p>
Suresh Sehi, MD and CEO, India Post Payments Bank
IPPB becomes BaaS

Those who live far away from banks or are unable to travel to an ATM to avail of services will now have a man walk in with a smartphone and help withdraw money, help pay utility bills and many more. He was earlier called a postman and many of them use to deliver an offline version of this service called money order.

Now, the oracle postmen will be able to deliver banking services across banks. Ever since, India Post took up a new avatar with a payments banks licence, it has re-branded itself IPPB and launch its services in September 2018.

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Initially, IPPB started serving the millions of existing customers of Indian Post by providing them digitally. It also offered them additional services and turned its customers ‘active’. Now IPPB also wants to bring home more customers outside the India Post network.

To make the transition, it wants to offer banking as a service (BAAS) to get direct access to many. With the kind of network that IPPB has, it can deliver banking services right to the doorstep.

“IPPB put in investments and created the ability that the dakia (post man) goes to a customer's house and provides the customer's access to any bank account. So, therefore, this entire infrastructure available for the banking industry,” said Suresh Sehi, MD&CEO, IPPB.

IPPB has re-engineered the entire postal network which is able to provide an intra-operable banking platform for the entire industry. IPPB today has converted 1,36,000 post offices into banking access points and 1,90,000 Gramin Dak Sevak and postmen have been simply equipped with biometric and a smartphone and they can provide banking services, Sethi adds.

In addition to approaching banks by itself, Indian Post Payments Bank is also discussing with the Finance Ministry to make its BaaS adoption much more smoother.

Offline and online services
With an online layer over a robust offline network, India Post’s banking offerings have a myriad of opportunities. In fact, it already has a total 1,55,000 offices and 2,50,000 postman. IPPB itself has another 650 branches.

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“On one side, we can say that there is an IPPB for their own customers and on the other side, there is an infrastructure investment by the government of India which is supporting the entire banking industry and in the rural, we have enhanced the banking infrastructure by two and a half times,’’ says Sethi.

How will IPPB’s BaaS model work?
Under BaaS, IPPB is leveraging the infrastructure and human capital of Indian Post. This allows them to send dakiya to offer a doorstep service to a customer anywhere in the country. Such as if an SBI customer wants to withdraw their money or make any transaction while at home and can’t access their bank account, they can simply call the dakiya home.

A dakiya is equipped with the smartphone and biometrics accessories, which will help him access a customer’s bank details via fingerprints and an Aadhaar number. This can help customer withdraw money. Any customer from any bank can avail and access this service.

“These services enabled on Automated Payment Systems (APS). And apart from withdrawing money, customers can also open an IPPB account from the same dakiya. They can withdraw money from SBI account and put it to an IPPB account and free to do use other services of IPPB such as bill payment, money transfer,” explains Sethi

In spite of 90% of India’s population came under the banking system after Jan Dhan scheme. However, around 48% of them are dormant accounts mainly due to lack of banking infrastructure in and around rural areas. IPPB is building its business model by offering banking services to these customers.

  • Published On Feb 24, 2020 at 08:00 AM IST
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