Business, but not as usual– A new HighwAAy to Serve the Underserved

Mr. Venkatram Jayanthy, MD & CEO India Post Payments Bank, spoke at SamvAAd 2023, providing key insights into the world of India Post Payment Bank and India Posts.

The Department of Posts, through its extensive network of post offices, covers every corner of the country. Recognizing the challenge of financial inclusion and access to financial services, policymakers turned to payment banks. With the widespread coverage and distribution network of the Department of Posts, they became an ideal choice to extend banking services. Mr. Venkatram Jayanthy shed light on how India Post Payment Bank has leveraged this network to drive financial inclusion.

• The Department of Posts has solved the challenge of access by leveraging its physical network. Across the country, there are a total of 1,60,000 post offices, with 1,30,000 post offices located in rural areas. On average, there is a post office every four to five villages, served by a postman known as Grameen Dak Sewak. These postmen deliver not only mail services but also financial services, including small savings schemes offered by the post office, which has been a part of the financial inclusion journey for many years.
• In 2018, the operations of India Post Payment Bank commenced. In addition to post office financial services, such as Post Office Savings Bank and Postal Life Insurance, regular banking services were introduced through the post offices. These services are digitally enabled and interoperable, meaning that customers of any bank can access banking services through the post office. Products like Aadhaar Enabled Payment System (AEPS), Bharat Bill Payment System (BBPS), and other NPCI-promoted services have been successfully delivered through post offices. The relevance of this network became evident during the COVID-19 pandemic when the entire banking system was affected. Postmen, being essential service providers, were able to deliver cash door-to-door, ensuring continued access to financial services, particularly in rural areas.
• The vast network of post offices serves as a foundation for leveraging digital infrastructure. It can be transformed into a universal service platform, offering a wide range of citizen-friendly services beyond just financial services. For example, postmen now utilise digital mediums to provide services such as pension services, digital life certificates, and child enrollments. These services would not be possible without the crucial last-mile connectivity provided by the postmen.

Mr. Venkatram Jayanthy emphasised the role of account aggregators and the value they bring to the postmen and financial inclusion:

There are new possibilities of how account aggregators can enhance the services provided by postmen and further financial inclusion:

• Proximity of the post offices to the data source: In the context of credit, it’s not just about the availability of data but also the availability of relevant data, especially when dealing with the informal sector.
• Information collection: Postmen, as Grameen Dak Sewaks, can play a vital role in gathering informal data, which is crucial for credit assessment.
• Leveraging interactions and connections: Using longstanding trust within the community, postmen can contribute to the availability of this essential data.

• Mr. Venkatram Jayanthy’s introduction to India Post Payment Bank and India Posts highlights the role of the Department of Posts in driving financial inclusion. With its vast network of post offices and dedicated postmen, the Department of Posts has been instrumental in delivering financial services to rural and remote areas.
• The transformation of post offices into India Post Payment Bank has allowed for the provision of regular banking services, digitally enabled and interoperable, ensuring access for all bank customers. The postmen, serving as bridges of last-mile connectivity, have played a crucial role, especially during challenging times like the COVID-19 pandemic.
• Additionally, the extensive network of post offices and postmen can be leveraged for a broader range of citizen-friendly services beyond financial services. By harnessing the power of account aggregators, postmen can contribute to gathering and providing relevant data for credit assessments, further enhancing financial inclusion efforts.