1. An overview of India Post Payments Bank

2. Table of Contents Content Banking Industry in India
Banking in India-Current State
Banking in India- The Other Side
Understanding the banking pain points of customers
Reserve Bank of India and Financial Inclusion
Slide No. 5 6 7 8
Payments Bank
What is a Payments Bank?
Why a Payments Bank?
Scope of Activities
Department of Posts’ current share in the market
Need for India Post Payments Bank (IPPB) 10 11 12 13 14
India Post Payments Bank (IPPB)
Vision for India Post Payments Bank
Goals and aspirations for IPPB
India Post Payments Bank – Products
Strategic Partnerships 16 17 18 19

3. Table of Contents Content India Post Payments Bank (IPPB) Channels
Initial wave of branch rollouts
Potential Customer Segments
Customer Story
Slide No. 20 21 22
23-25
IPPB and DoP
IPPB uniquely placed to win with DoP
Department of Posts and India Post Payments Bank
India Post Payments Bank - Network
Your role in making IPPB a success
Summary 27 28 29 30 31
QUESTIONS 32

4. Banking Industry in India

5. Banking In India - Current State
The Indian banking system consists of 26 public sector banks, 25 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks
Public-sector banks control nearly 80 percent of the market
Smaller shares for private peers
Banks are exploring the option to launch contact-less credit and debit cards in the market .
The cards, which use near field communication (NFC) mechanism, allowing customers to transact seamlessly
Global rating agency Moody's has upgraded its outlook for the Indian banking system to stable from negative
Standard & Poor’s estimates that credit growth in India’s banking sector would improve to per cent in FY16 from less than 10 per cent in the second half of CY14

6. 30 Crore 8 More than 80% 536 46 Crore 61%
Banking In India – The Other Side 30
Crore
underbanked adults in India 8
bank branches per 100,000 population for rural areas*
More than 80%
of population is not covered by any health insurance*
536
number of female Savings Bank accounts per 1000 of female population* 46
Crore
adult with accounts at a financial institutions are dormant
61%
of rural households source loans from non-institutional agencies*
*Sources: Report of the Committee on Medium-term Path on Financial Inclusion by RBI, National Health Profile 2015, compiled by the Central Bureau of Health Intelligence, Times of India-In India bank account penetration surges, but 43% dormant( Nov. 10,2015)

7. Understanding the Banking Pain Points of Customers
Confused about financial products
Banking is for the rich and wealthy – not for poor people, who might end up losing money in the process
Afraid of perceived complexity
Banking is cumbersome and inefficient
What does he THINK and FEEL?
Discrimination in offering rural people bank products.
People are unfriendly and rude in the bank
What does he HEAR?
What does he SEE?
Bank officials do not value villagers. They are insulted, intimidated and made to wait longer
Digital banking using phone or online or even cards is risky
What does he SAY AND DO?
Bank branch is really far. It is expensive to go there
Rarely goes to a bank,
Conducts all transactions in cash – spends time in queues to make bill payments
Prefers to stick to informal channels
Does not receive any financial education

8. Reserve Bank of India and Financial Inclusion
Reserve Bank of India (RBI), on September 23, 2013, appointed the Nachiket Mor committee to propose measures for achieving financial inclusion and increased access to financial services. The major recommendations of the Committee were:
Affordable Credit
Removing barriers for
banks
Universal Access
Bank Account for every citizen at the time of registering for an Aadhaar card
Priority Sector Lending
Removal of cap on interest rate on loans
Customer
Protection
Firms liable for ensuring suitability of products issued

9. Payments Bank

10. Payments Bank - What is a Payments Bank?
A “differentiated bank” to further financial inclusion for the unbanked and underbanked population.
Will provide current, savings accounts and payments or remittance services to migrant labour workforce, low income households, small businesses, unorganised sector entities and other users.

11. Payments Bank – Why a Payments Bank?
A vast majority of the rural population (approximately 61%, as per RBI), is still not covered by formal banking and are underbanked.
A Payments bank will provide new low cost, lean, modern technology based delivery models that will further financial inclusion with the differentiated scope of activities

12. ₹ Payments Bank – Scope of Activities
The scope of activities that a Payments bank can undertake is governed by the RBI guidelines on Payments bank
Savings and Current accounts to hold a maximum balance of Rs. 1 lakh
Payments and remittance services through various channels including branches, Automated Teller Machines (ATMs), Business Correspondents (BCs), mobile banking, and internet banking.
Function as Business Correspondent (BC) of another bank
Payment and remittance mechanism approved by RBI, such as RTGS / NEFT / IMPS.
Cross border remittance transactions, personal payments or remittances on the current account.
Distribute third party products such as mutual fund units, pension products, etc. with the prior approval of the RBI
Utility bill payments etc. on behalf of its customers and general public. ₹
Instructure Notes:

13. Department of Posts’ Current Share in the market
The size of the opportunity is vast. DoP even with its superior reach has not been able to capture market share in line with its scale of operations
Key Retail Payments
Retail Payments (in-store/ physical)
Rs. 42 Lakh Crore
Mass Transit & Transport
Rs. 9 Lakh Crore
Bill Payments**
E-Commerce
Rs. 1.6 Lakh Crore
Key Retail Fund Transfers
International Inward Remittance*
Rs. 5 Lakh Crore
DoP Share ~ 0.3%
Subsidies
Rs. 3.6 Lakh Crore
DoP Share*** ~ 15%
Domestic Remittance
Rs. 1.2 Lakh Crore
DoP Share ~ 4%
* Significant volume of last mile transactions in cash
** Top 20 cities
*** Only DBT Share
Sources: RBI, Industry reports, Deloitte Analysis, Figures for 2015

14. Need for India Post Payments Bank (IPPB)
Nation needs IPPB because
It can further financial inclusion agenda as it is the only organization that has wide branch network with majority of its branches in rural India
DoP needs IPPB because
IPPB will help arrest DoP’s share decline
IPPB will contribute a sizeable revenue for DoP
IPPB will strengthen the relevance / equity of DoP
IPPB

15. India Post Payments Bank

16. Vision for India Post Payments Bank
Building the most accessible, affordable and trusted bank for the common man
Spearheading the financial inclusion agenda by removing the barriers for the unbanked and reducing the opportunity cost for the underbanked populace
IPPB will be a 100% subsidiary payments bank of the Department of Posts and will have an independent board of directors with representation from the Department and other stakeholders from within the Government to ensure strategic alignment with the overall objectives of the DoP and the Government of India.

17. Goals and aspirations for IPPB
Financial Goals
Be the largest (Payments) banking network in India
Non-financial Goals
Eradicate financial exclusion from every nook and corner of the country
Create an ecosystem of ~ million Customer+ MSME base in 5 years
Enhance brand equity / relevance of India Post
Be prepared to become a universal bank in the long run
Social Goals
Improve the livelihood of various communities in India by providing them access to multiple banking and financial products
Undertake various initiatives to ensure movement towards a cashless society

18. IPPB Product Portfolio
India Post Payments Bank – Products
CASA Accounts Savings Bank accounts with 1 lac balance limit; Current accounts for MSME, Village Panchayat, SHGs
IPPB Product Portfolio
CASA Accounts
3rd Party
Products
Remittance and Bill Payments
C2G and G2C Payments
Facilitate e-Com
3rd Party Products
3rd party partnerships to provide loans, insurance, pension products, MF etc.
Remittance and Bill Payments International and Domestic Remittance
Utility bills, municipal dues, fees etc.
C2G and G2C Payments
C2G: Government payments, taxes etc.
G2C: DBT, MNREGA, NSAP disbursements
Facilitate e-Com Provide platform for enabling online purchase

19. Strategic Partnerships
In order to provide an end-to-end experience to its customer, IPPB would need to form strategic partnerships with selected players
Financial Partnerships (for product and capabilities)
Partnerships formed with third parties which enables IPPB to provide to its customer and end-to-end financial product portfolio
Loan Products
Health Insurance
Life Insurance
Remittance
Mutual Fund $

20. Channels Services IPPB will be able to provide
Post Office counters
IPPB branches
Digital transactions at Merchant locations
ATMs & Micro-ATMs
Door-step banking through postmen/ GDS
Internet / mobile banking
Digital wallets
IPPB will be able to provide
Affordable and best in class services to its customers by leveraging on the latest services delivery platforms.
Door step banking via Postmen and GDS.
A push towards less cash economy by incentivising digital transactions
Key differentiator in terms of DoP’s reach and network to catalyze financial inclusion
eKYC
AEPS
IMPS
UPI

21. Initial wave of branch rollouts
50 locations across different parts of the country and meeting varying criteria have been identified for the first wave of branch rollouts by mid-2017

22. Potential Customer Segments
Six customer segments were prioritized based on their potential, overlap with IPPB’s existing customer base, influence factor and ease of acquisition
Rural heartlands
Small farmers, vegetable sellers, small shop owners, rural homemakers
Rural influencers
Panchayat, large farmers, landlord, teachers, ASHA / NGO / SHG workers, shop owners, anganwadis
Urban blue collar
Masons, electricians, laborers, drivers, petty traders, factory workers
Rural students
Rural students above 15 years in school and colleges
Elderly
60 years and above, pensioners and retired professionals
Urban home maker

23. Customer Story
IPPB offerings for the priority segments were identified and value proposition was defined targeted to them
Auro is a worker in a glass factory in a town in West Bengal
Remittance to family in village
Low cost, hand-to-hand formal remittance
Securing cash earnings and doing micro-investment
Awareness about new financial products
Doorstep cash deposit via GDS
Financial education via GDS, at branch, and public demos
Personal insurance products
Paying bills
Access to 3rd party health and life insurance
Blue Collar
Bills payment facilities
Maximizing interest earning on savings
Access to loans
Access to 3rd party and loans
Access to POSB’s RDs, FDs, TDs
e-documentation, Aadhaar enabled services
Speedy, hassle free banking services
Legend
IPPB offering

24. Customer Story
IPPB offerings for the priority segments were identified and value proposition was defined targeted to them
Chandra Gupta is a 70 year old pensioner residing in Madhya Pradesh. He supported by his two sons, the older son is married
Ease of money transfer
Hand to hand remittances via doorstep at low cost
Easy access to pension funds
Gifting for grandson’s birthday
Direct transfer to IPPB account
P2P transfer through wallet
Minimal effort to access banking services
Higher interest rates for deposits
Doorstep banking services for deposits, withdrawals, etc.
Elderly
Integration with senior citizen saving schemes
Payments for medicines and other household expenditure
Loans for medical emergencies
Medical loans through third party partnerships
Provision of P2M payments
Convenient electricity bill payments
Bill payments
Legend
IPPB offering

25. Customer Story
IPPB offerings for the priority segments were identified and value proposition was defined targeted to them
Akash is the owner of a kirana store in Ludhiana – he has 3 employees and an income of INR Lac p.a.
Managing daily cash requirements
Daily doorstep cash management services
Easy payments to suppliers
Quick payment of bills
Online transfers from IPPB CASA
Bill payments through self care
Easy way of accepting payments
Convenient payment of salaries to employees
P2M mobile-to-mobile payments
Kirana store
SA for employees – direct salary transfer via NEFT
Effective inventory management
Requirement of additional working capital for growth
Loans through third party partnerships
Business improvement tools
Shop insurance through third party partnerships
Ensure safety of stock, shop
Legend
IPPB offering

26. IPPB and DoP

27. IPPB is uniquely placed to win with DoP
Largest network in India
Access to banking
Door step banking provided by >150,000 GDS + Postmen
IPPB is uniquely positioned to win with DoP
DoP
Existing customer base
160 Million savings bank accounts
330 Million POSB accounts (MIS, FD, RD etc.)
Brand identity & trust
Iconic brand depicting trust especially in the rural areas

28. Department of Posts and India Post Payments Bank
While IPPB, will be responsible for setting up the payments bank and designing the products, it will extensively leverage DoP’s physical, technological, human, and brand assets
Existing staff to manage counter operations and customer interface for IPPB
Design products, define standards, build 3rd party tie-ups, and manage marketing and customer grievances
IPPB
DoP
Leverage DoP’s existing customer base (~160 million savings accounts)
Assist IPPB manage excess (> 1 lac) balance of IPPB customers and pay interest on the same
Offer a complete suite of services by offering DoP’s deposit products
Set up 650 branches
1.55 lac POs to be physical access points for IPPB
Leverage DoP’s brand

29. India Post Payments Bank - Network
Approximately 25,000 HOs or SOs and approximately another 1.3 Lakh BOs to act as access points for IPPB. Around 90% of the access points to be in rural areas
IPPB will also leverage DoP’s people network. GDS and Postmen will be actively involved in its operations
DoP
IPPB
Dak Bhawan (1)
Circle (22)
Regional Office (47)
Division Office (446)
HOs (810)
SOs & BOs (1.5L)
IPPB Corporate Office
IPPB Branches (650)
IPPB Cells at Circle HQs
All 1.55 lac Post Offices would be physical access points for IPPB

30. Your role in making IPPB a success
DoP employees at all levels directly or indirectly will be involved in the functioning of IPPB.
IPPB will work to proliferate financial inclusion, your active support to this cause will contribute towards nation building by providing every Indian access to organized banking sector
GDS
Counter
Staff
Study of the IPPB and DoP interactions indicate that the staff of DoP has an important role to play in functioning of IPPB and making it a success
Counter Staff, Postmen and GDS will be the key customer touchpoints for IPPB
Agents
Postmen

31. Summary In this module now we know:
The objective of Financial Inclusion is to extend financial services to the large unserved population of the country to unlock its growth potential.
A Payments bank is a “differentiated bank” to further financial inclusion for the unbanked and underbanked population
A Payments bank will provide new low cost, lean, modern technology based delivery models that will further financial inclusion with the differentiated scope of activities
The scope of activities that a Payments bank can undertake is governed by the RBI guidelines on Payments bank
IPPB will be a 100% subsidiary payments bank of the Department of Posts and will have an independent board of directors.
IPPB will drive the benefits of financial inclusion by bringing a host of financial products to suit the needs of different strata of society with special focus on the marginalized sections rural areas
GDS and Postmen will provide door-step banking

32. Questions?

33. Thank You