IPPB provides banking account and services to micro, small and medium enterprises (MSMEs), senior citizens, students, migrant population, low-income households, unorganised sector and other groups with special service requirements.
The DoP has been successfully running the Post Office Savings Bank
for the Ministry of Finance. Setting up its independently owned bank is the next logical progression. Based on feasibility studies and a subsequent Detailed Project Report
, the Department, in 2013, made an application to the Reserve Bank of India (RBI) and a proposal to the public investment board (PIB) to set up a universal bank. However, the Department was advised by the PIB to set up a “differentiated bank” under the relevant guidelines. Accordingly, when the RBI came up with the guidelines for licensing of Payments Banks in November 2014, the Department made an application for the same and got the in-principle approval in September 2015 for setting up its payments bank.
While the Post Office Savings Bank focusses more on return from small savings, the Payments Banks is focussed on transactions.