Digital banking services will soon be available to post office savings account holders

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The government has approved the linking of post office savings accounts with India Post Payments Bank (IPPB) accounts, that will result in 34 crore savings account customers enjoying digital banking services from the month of May 2018. This move will also help post office account holders transfer money to other bank accounts through digital banking facilities.

Currently, there are 17 crore pure savings bank accounts and several recurring deposits and monthly income schemes that constitute 34 crore post office savings accounts.

Post-office-savings-accounts-and-digital-banking
Post office savings account customers will soon be able to enjoy digital banking

The linking of post office savings accounts to IPPB accounts implies that 1.55 lakh post office branches will be linked to the IPPB, resulting in India’s largest banking network. Although India Post offers almost all core banking services to customers, money transfer facility is provided only within post office savings bank (POSB) accounts.

Currently, IPPB is under the governance of the Reserve Bank of India (RBI) and the finance ministry regulates the post office banking services. The customers of IPPB are able to use RTGS, NEFT, and other such online money transfer facilities. After the POSB accounts are attached to IPPB, the customers of those accounts can avail complete digital banking services, including money transfer facilities offered by other banks. It is also understood that the service will be optional; i.e., the customer can choose to link the POSB account with IPPB, if required.

Out of the 1.55 lakh post offices existing in the country, 1.3 lakh branches operate from rural regions.

There is a second phase of operations planned, starting September 2018. During this phase, post office savings account holders will be able to make payments towards schemes such as Sukanya Samriddhi Yojana, speed post, and recurring deposits through their IPPB accounts. Customers will also be able to pay merchants such as grocery store contacts, ticketing counters, etc. through their apps. By then, merchants will be registered on the apps as well.

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