"Of the 11 payments banks that are licensed, we are the only one that is government-owned. There is a difference in terms of our business objective. We do not seek profit but want to create public value," said A P Singh, CEO, IPPB.
"We will be putting up payment infrastructure that can be used by all — banks, e-wallet companies, insurance companies. Basically, we will shun exclusivity and there will be no discrimination on anyone coming on our platform," said Singh. He was speaking at the Digital Money 2017 conference that marked 10 years of the digital payment industry.
IPPB, which was launched in January, has opened eight access points — four in Jharkhand and four in Chhattisgarh. "Since, we are a post office and have a large customer base, acquiring customers is not a problem. But getting them to transact is a huge challenge," said Singh. He added that offering higher interest rates on savings was not working.
IPPB has started business with a paid up capital of Rs 125 crore from the government. It has also received Rs 375 crore as grant-in-aid according to the Output-Outcome Framework for Schemes 2017-18 for the department of posts.
"The grant is to deepen and widen the market, not just for us but for everyone. The postman will do assisted transactions and help self-service transactions," added Singh.Speaking at the summit Srikrishnan H, MD & CEO, Jio Payments Bank (a joint venture between Reliance Industries and SBI), said that the journey for digital finance through the e-wallet route did not seem to be valid any more and the stored value model is not holding good.
Aditya Birla Idea Payments Bank MD & CEO Sudhakar Ramasubramanian said that although telco-promoted banks could get the size and scale, the challenge was to get customers to transact. "For payment banks, this is a daily labour model. We do not have the advantage of annuity income that a 'spread' business brings," he added.