India Post Payments Bank (IPPB) is offering its account holders an option to de-link Aadhaar number. This probably is the first instance where a government owned entity is offering a choice to customers on Aadhaar.
The offer to de-link Aadhaar from the Payments Bank is good and will allow customers to opt out from linking their bank account with the unique ID number. For this the customers is required to submit a form to the Payments Bank. However, in this form, there are few issues, which needs to be sorted out by the Department of Posts (DoP) to allow customers use bank account without anything to worry.
Under Declaration, the form seeks consent from the account holder to allow seeding her account with her Aadhaar, and map this with the National Payments Corp of India (NPCI) to enable direct benefit transfer (DBT) from the government. It also seeks consent from the account holder to allow use of Aadhaar details to authenticate her UIDAI and use her bank registered mobile number for receiving SMS alerts.
India Post Payments Bank allows three types of account that can be opened with just Rs100 without any requirement for minimum quarterly average balance (MAB). Besides offering first debit card free, the Bank offers in interest rate of 5.5% on savings. This debit card can be used free of costs across all automated teller machines (ATMs) of India Post and Punjab National Bank. The Bank customer can withdraw up to Rs10000 for each transaction with a ceiling of Rs25,000 per day. On point of sales (PoS) shops and e-commerce outlets, the customer can spend maximum Rs65,000 using IPPB ATM card.
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.
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