Around 340 million post office savings account holders will be able to avail a full-fledged digital banking service from May as the government has approved linking such accounts with that of India Post Payments Bank (IPPB).
"The finance ministry has approved linking of savings bank accounts at post offices with IPPB accounts. This will enable post office account holders to transfer money from their account to any bank accounts...," an official source told PTI.
The 340 million savings accounts comprise 170 million post office savings bank accounts and rest are those subscribed monthly income scheme, recurring deposits etc.
The move also paves the way for creating of country's largest banking network as India Post has plans to link all 155,000 post office branches with the IPPB.
India Post has started core banking service but it offers money transfer service within post office savings bank (POSB) accounts.
"IPPB is governed by Reserve Bank of India and banking service of post offices comes under the finance ministry. IPPB customers can use NEFT, RTGS and other money transfer services as available for any banking customers. Once POSB accounts are linked with IPPB, customers will be able to enjoy all money transfer service like other banks," the source said.
He said that by May, India Post will give option to POSB account customers to avail this facility.
"The service will be optional. If post office account holders opt for it, their account will be linked to their IPPB account," the source said.
As per an official statement issued earlier, India Post plans to start functioning of all 650 IPPB branches from this month. All 650 branches will be connected to smaller post offices in the districts.
"IPPB branches and all the access points will be linked to postal network which has 155,000 post offices in total. Out of this, 103,000 branches are in rural area," the source said.
With 155,000 branches, India Post will be able to create country's largest banking network.
"In the second phase, starting September, account holders in post office will have an option to pay for post office products from their IPPB accounts including deposit money for Sukanya Samridhi Yojana, recurring deposits, speed post, etc," he said.
Also, the IPPB will start registering merchants who will accept payment from its customer with help of application. The IPPB customers will be able to make payments to various merchants like grocery store, tickets etc with help of their app, the source said.