•  IPPBL(India Post Payment Bank Limited ) has received the Certificate of Incorporation from the Registrar of Companies, Ministry of Corporate Affairs under the Companies Act 2013.
• The incorporation of the IPPB Ltd paves the way for it to begin hiring of banking professionals to set up the bank and begin its operations in 2017.
• This will be the first public sector undertaking under the Department of Posts.
• The Department of Posts is expected to complete the roll out of its branches all over the country by September 2017. The government said this could be the fastest roll out for a bank anywhere in the world.

About IPPBL:

• The India Post Payments Bank aims to become the most accessible bank in the world, riding on advanced banking and payments technology. Coupled with physical presence across 1.55 lakh post offices and the reach of the postman, the India Post Payments Bank plans to become a powerful and effective vehicle of real financial inclusion in the country.
• Payments bank allows mobile firms, supermarket 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.
• IPPB will offer digitally-enabled payments, banking and remittance services of all kinds among entities and individuals as also provide access to insurance, mutual funds, pension and credit products in partnership with third-party financial service providers and banks.
• IPPB is being set up primarily to achieve the goal of full financial inclusion of the people in our country.
• Like other payments banks, IPPB will target financially excluded customers such as migrant workers, low-income households and tiny businesses. It will not lend money and, as a result, will be shielded from the risks that conventional banks are exposed to. And it will have a huge offline presence to complement its online one, for which the department of posts has already identified a core banking solution
• The department of posts was among the 11 entities that got an in-principle approval from the Reserve Bank of India (RBI) to start a payments bank. Three entities have surrendered their licence after they discovered the business is characterized by high volumes and low profit margins. For India Post, though, the business will be a natural extension.
• The India Post Payments Bank will be managed professionally and most of its Grade A employees will be hired from market.
• The bank’s board will have representation from various other government departments, including the Department of Posts, Department of Expenditure, Department of Economic Services etc.
• Remuneration package for employees has been kept competitive to attract talent from public sector banks.

Analysis(on payment banks):

• The goal behind creating payment banks is to bring financial inclusion by making it easier for anyone to get a bank account.
• The payment bank licence will enable to offer a more comprehensive portfolio of banking and financial products and services, accelerating India's journey into a cashless economy.
• The new payment banks will also make people less dependent on cash, even for small sums, and since a mobile wallet could be a bank account soon, this move could, over time, have a big impact on m-commerce.
• But payment banks facing some challenges also. Even after launching payment banks, all those who got new license are not so enthusiastic about the future of these banks . Because, these entities can’t undertake any lending businesses and the income stream is initially restricted to remittances. Eventually, they can cross-sell banking products through their reach and earn a fee. But neither of these two streams of revenue are high-margin businesses.
• RBI has put in place strict rules on how these banks can deploy the deposits they garner. 75% has to go into government securities. This limits their ability to earn from the deposit base as well. Garnering a strong deposit base in the first place will be a challenge as well. Besides, if these banks want to steal customers away from banks, they may have to offer more than the 4% interest rate that banks do. But to do that, payment banks need to be able to earn enough on deposits as well.
• These banks will make no money on the spread between deposit and investment. Indeed on the deposit side, they will need to pay consistently higher interest to attract deposits.
• So, these banks won't be allowed to lend, depriving them from of the main source of a bank's revenue.
• Over the last few years, large banks, including private lenders, have significantly expanded their networks in rural areas. This means that these markets are no longer wide open for new business with limited competition. Banks are offering most services that payments banks can and hence, for payments banks to offer a new and differentiated proposition will not be easy.