India Post Payment Bank Launched By P.M. Narendera Modi

India Post Payment Bank Launched By P.M. Narendera Modi

Recently, Prime Minister Narendra Modi launched India Post Payments Bank (IPPB) at the Talkatora Stadium in New Delhi. Because of this, Payments Bank has come to the discussion again. It is worth mentioning that the Pilot project of IPPB was started on January 30, 2017, from Raipur and Ranchi. Under the Department of Posts of the Ministry of Communications, IPPB is a 100 percent proprietary payment bank of the Government of India.

Let us tell you about 650 branches and 3250 service centers of this payment bank having ‘your bank your door’ tagline opened. Hopefully, by December 2018, all the one hundred fifty thousand post offices across the country will be connected to the post office IPPB system. The IPPB will assist in financing the Central Government’s financial inclusion by providing banking services in rural areas.

It will provide services such as Savings and Current Accounts, Money Transfer, Direct Benefit Transfer, and Bill Payment, in 13 languages. These services will be delivered to the general public through counter services, micro ATMs, mobile banking apps, SMS, and IVR. IPPB will accept deposits up to one lakh rupees.

An account with more than one lakh rupees will be automatically converted to a post office savings account. The IPPB will be able to work through the huge network of postal department spread over the country and over 3 lakh post offices and rural post offices.


This article focuses on how the form of banks in independent India has been changing. Initially, the bank acting as a banking company has been moving forward until reaching the bank as a post-payment bank? To what extent did these banks influence India’s economy and financial inclusion? In the periphery of all these questions, we look at the banking pattern of the country and its meaning.


Banks are the backbone of any country’s economy. Historians start dating the banking system in the country from the beginning of the 18th century. It is said that the British had revolutionized the Indian economy by bringing a modern banking system. The British established banks in three Presidencies such as Madras, Bombay, and Bengal to collect funds in a planned manner. After this, the Imperial Bank was established in 1921 by combining the three Presidency Banks.

State Bank of India started functioning after acquiring all the properties of the Imperial Bank after the independence of India in 1955. Let us know that State Bank of India is the oldest and largest business bank in the country. It is not kept in the category of nationalized banks. In nationalized banks, those banks are kept which have come under the nationalization of 1969 and subsequently the government.

It was about the State Bank of India. Now talk about the central bank, the Reserve Bank of India. 1926 Hilton Young Commission suggested that a central bank should be established apart from the Imperial Bank which can issue notes along with foreign exchange fund management. It is also important to know here that the Hilton Young Commission was the first commission that had told the Reserve Bank to bring it.

Reserve Bank of India started functioning from 1st April 1935 through the Reserve Bank of India Act, 1934. Let us tell you that after the Verma split, the Reserve Bank had worked as a banker of that government till 1942 and till 1947. After the partition of the country till 1948, it also served as the Central Bank of Pakistan. In 1949 the Reserve Bank was nationalized and since then it is the central bank of the country.

At this time many other commercial banks were working in the country besides the RBI and SBI. Still, it was constantly being felt that these banks are being constantly neglected by agriculture, small and cottage industries, villages, and towns.

At that time the government nationalized 14 banks in 1969 to increase the economic growth of the country. Giving further detail to this step, the government nationalized 6 more banks in 1980. Despite all this, its actual goal could not be achieved. That’s why the government constituted several commissions to improve the bank sector

Banking sector improvement

To improve the banking sector, the government had formed a high-level committee under the chairmanship of M. Narasimham in 1991. In this report, the committee said that in the banking sector, the four-level structure should be arranged in which there will be three or four big banks. SBI will be involved and it will get the top position and it will also be able to do its work at the international level. It said that the measures suggested by the Basel Committee need to be gradually achieved.

The Narasimhan Committee had also told to eliminate the license system. For the second time in the banking sector, a committee was formed under the chairmanship of M. Narasimham. This committee emphasized the strengthening of the banking system keeping in view the convertibility of capital account in its report.

The committee also emphasized mixing large banks and stressing on the opening of small local banks where there are some international and some national level banks, thereby encouraging local business, industry, and agriculture of any state. So to receive. In this regard, Nachiket Mor Committee was formed by the Reserve Bank.

The committee also emphasized mixing large banks and stressing on the opening of small local banks where there are some international and some national level banks, thereby encouraging local business, industry, and agriculture of any state. So to receive. In this regard, Nachiket Mor Committee was formed by the Reserve Bank.

This committee talked about the licensing of large financial services and payment banks for small businesses and low-income families. Based on the recommendation of this committee, the government has introduced India Post Payments Bank ie IPPB.

Significantly, the Basel 3 standard was brought to improve banks. Let us tell you that Basel 3 tries to improve those aspects of the banking system, which has caused the entire world to face an economic recession. The mathematics behind it is that the developed economies have to spend a lot of money to save their financial system. For this, the country does not want to face such a problem again in the future. For these reasons, the banking system must be controlled in such a way that there is not only a qualitative improvement in the bank’s capital but also the capacity to bear the losses of the banks.

How is the nature of banks changing in today’s time?

In today’s situation, the future of the banks in the circumstances of banking behaviors and changes in the needs of consumers is in the midst of crisis. Now it is also believed that the period of traditional banking has ended, and the bank’s banking concept has been strengthened. In this regard, Bill Gates once said that banking is essential but not a bank.

Today, technology has completely changed the nature of banks. It includes Big Data, Cloud Computing, Smartphones, and other such innovations.

With the introduction of mobile banking, there has been a lot of change in the manner of communication between customers and the bank. Staying away from home by mobile banking can also get information about your bank accounts. At any time, the transfer of money from the account, payment of bills, etc. can be done. This feature is available 24 hours a day.

Similarly, ATMs have made the banking system very simple, safe, and convenient.

The cashless economy has made big changes in banking format. On this, on the one hand, while saving people from long queues along with saving time, there was a great help in curbing black money on the other. This led to transparency in the economy. Due to the cashless arrangements, the rupees were removed from the people but they were replaced by plastic currency.

With the solution of the problems of people, the plastic currency has benefited the environment, as well as the economy, has also accelerated. The cashless economy has also helped push banks forward.

Therefore, banks have made reasonable efforts to connect the margins of society to the mainstream of economic development. In this endeavor, Micro Units Development and Refinance Agency Limited Bank, which constitutes the currency bank, also holds great importance. It is a new body formed by the Government of India for activities related to the development and refinancing of micro-enterprises. Similarly, Self Help Groups also strengthen the process of financial inclusion which is very important for the backward classes of the society.


Significantly, the nature of the banks is constantly changing in the era of globalization. At first, where long queues were kept in the banks, the technique has now made this work simple and easy.

Using technology, payment banks have played an important role in making this work easier. Modern banking, especially the cashless economy, is a matter of concern during the digitization of banking transactions.

But the Department of Information Technology, along with institutions like IIT, has tried to deal with it in various ways. The government is giving a lot of emphasis on financial inclusion through banking through schemes like Jan-Dhan Yojana and Direct Benefit Transfer. It is also a matter of concern for banks not reaching out to rural areas. Due to being inaccessible and difficult areas, banking services are still not available in many areas.

The government has tried to solve this problem by appointing a large number of banking correspondents. These banks work closely with corporate banks and rural people. Similarly, the government has recently decided to merge three banks to improve the banking sector.

This includes Dena Bank, Vijaya Bank, and Bank of Baroda. Overall, today’s banking pattern in India is adopting new art in changing the environment. In such a situation this clover must play a role in improving the socio-economic development of the Indian public.


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