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Consider the following statements regarding India Post Payments Banks (IPPB):
- They are established under the Department of Posts with 100% equity owned by the Government of India.
- They can accept time deposits or NRI deposits.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding India Post Payments Banks ...
Recently, the customers of India Post Payments Bank have been receiving an SMS claiming that their accounts will be blocked if they fail to update their PAN card details, which the Press Information Bureau called fake.
About India Post Payments Bank (IPPB):
- IPPB has been established under the Department of Posts, Ministry of Communication, with 100% equity owned by the Government of India.
- IPPB was launched on September 1, 2018, aimed at making banking services available at people’s doorstep.
- Mandate: To remove barriers for the unbanked and under-banked and reach the last mile, leveraging a network comprising 160,000 post offices (145,000 in rural areas) and 400,000 postal employees.
- Headquarters: New Delhi
- Functions:
- The operations of IPPB will be on a smaller scale as compared to other banks and will not advance loans or issue credit cards to avoid risk.
- It will accept deposits, offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third-party fund transfers.
- It will accept deposits up to Rs 2 lakh, beyond which the account will be automatically converted into a post office savings account.
- The products and services of the bank will be made available through various mediums such as counter services, micro ATMs, mobile banking apps, messages, and interactive voice responses.
- The IPPB will use Aadhaar to open accounts, and a QR card and biometrics will be used for authentication, transactions, and payments.
What are Payments Banks?
- A payments bank is like any other bank but operates on a smaller scale without involving any credit risk.
- It was set up on the recommendations of the Nachiket Mor Committee.
- Objective: Widen the spread of payment and financial services to small businesses, low-income households, and migrant labor workforce in a secured technology-driven environment.
- They are registered under the Companies Act 2013 but are governed by a host of legislations such as the Banking Regulation Act, 1949; RBI Act, 1934; Foreign Exchange Management Act, 1999, etc.
- It needs to have a minimum paid-up capital of Rs. 100,00,00,000.
- Activities that can be performed:
- It can take deposits up to Rs. 2,00,000. It can accept demand deposits in the form of savings and current accounts.
- The money received as deposits can be invested in secure government securities only in the form of Statutory Liquidity Ratio (SLR). This must amount to 75% of the demand deposit balance.
- The remaining 25% is to be placed as time deposits with other scheduled commercial banks.
- It can offer remittance services, mobile payments/transfers/purchases, and other banking services like ATM/debit cards, net banking, and third-party fund transfers.
- Activities that cannot be performed:
- It cannot issue loans and credit cards.
- It cannot accept time deposits or NRI deposits.
- It cannot set up subsidiaries to undertake non-banking financial activities.
Hence only statement 1 is correct.
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Consider the following statements regarding India Post Payments Banks ...
India Post Payments Banks (IPPB)
Statement 1: They are established under the Department of Posts with 100% equity owned by the Government of India.
Yes, this statement is correct. India Post Payments Banks (IPPB) are established under the Department of Posts, which is a part of the Ministry of Communications, Government of India. The IPPB is a public sector company with 100% equity owned by the Government of India.
Statement 2: They can accept time deposits or NRI deposits.
No, this statement is incorrect. India Post Payments Banks (IPPB) do not accept time deposits or NRI deposits. The primary objective of IPPB is to provide basic banking services to the unbanked and underbanked sections of society. These services include savings accounts, current accounts, money transfer, bill payments, and other related services. However, IPPB is not authorized to accept time deposits or NRI deposits.
Explanation:
India Post Payments Banks (IPPB) was launched in September 2018 with the aim of providing affordable and accessible banking services to the masses, especially in rural areas. The IPPB leverages the extensive postal network of India, which reaches even the remotest parts of the country. It aims to bridge the gap between the banking sector and the unbanked population by providing them with a range of basic banking services.
The IPPB offers savings accounts, current accounts, money transfer, bill payments, and other related services. It also provides digital banking facilities such as mobile banking, internet banking, and SMS banking. Customers can access these services through the IPPB mobile app, internet banking portal, or by visiting their nearest post office.
However, it is important to note that IPPB is not authorized to accept time deposits or NRI deposits. Time deposits refer to fixed deposits or term deposits where the money is deposited for a specific period of time and earns a fixed rate of interest. NRI deposits refer to the deposits made by Non-Resident Indians in Indian banks. These types of deposits are typically offered by commercial banks and not by payment banks like IPPB.
In conclusion, the correct statement regarding India Post Payments Banks (IPPB) is statement 1 only.
Statement 1: They are established under the Department of Posts with 100% equity owned by the Government of India.
Yes, this statement is correct. India Post Payments Banks (IPPB) are established under the Department of Posts, which is a part of the Ministry of Communications, Government of India. The IPPB is a public sector company with 100% equity owned by the Government of India.
Statement 2: They can accept time deposits or NRI deposits.
No, this statement is incorrect. India Post Payments Banks (IPPB) do not accept time deposits or NRI deposits. The primary objective of IPPB is to provide basic banking services to the unbanked and underbanked sections of society. These services include savings accounts, current accounts, money transfer, bill payments, and other related services. However, IPPB is not authorized to accept time deposits or NRI deposits.
Explanation:
India Post Payments Banks (IPPB) was launched in September 2018 with the aim of providing affordable and accessible banking services to the masses, especially in rural areas. The IPPB leverages the extensive postal network of India, which reaches even the remotest parts of the country. It aims to bridge the gap between the banking sector and the unbanked population by providing them with a range of basic banking services.
The IPPB offers savings accounts, current accounts, money transfer, bill payments, and other related services. It also provides digital banking facilities such as mobile banking, internet banking, and SMS banking. Customers can access these services through the IPPB mobile app, internet banking portal, or by visiting their nearest post office.
However, it is important to note that IPPB is not authorized to accept time deposits or NRI deposits. Time deposits refer to fixed deposits or term deposits where the money is deposited for a specific period of time and earns a fixed rate of interest. NRI deposits refer to the deposits made by Non-Resident Indians in Indian banks. These types of deposits are typically offered by commercial banks and not by payment banks like IPPB.
In conclusion, the correct statement regarding India Post Payments Banks (IPPB) is statement 1 only.
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Consider the following statements regarding India Post Payments Banks (IPPB): They are established under the Department of Posts with100% equity owned by the Government of India. They can accept time depositsorNRI deposits.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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