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FINCLUVATION

22nd April, 2022

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Context - The India Post Payments Bank has launched ‘Fincluvation’ to promote financial Inclusion.

 

Fincluvation

  • Fincluvation is a joint initiative to collaborate with the Fintech Start-ups to develop innovative solutions for financial inclusion.
  • The initiative was announced by the India Post Payments Bank (IPPB) on the occasion of the 75th anniversary of Indian Independence and the ongoing Azadi ka Amrit Mahotsav.
  • The main objective of the ‘Fincluvation’ initiative is to create a powerful platform to mobilize start-ups toward building significant financial products to promote financial inclusion.
  • Under the new initiative, Start-ups will be encouraged to develop solutions related to;
    • Creditization: Develop Innovative and Inclusive credit products to target customers' needs and take them to their doorsteps through the Postal network.
    • Digitization: Take steps to bring comfort to customers through the convergence of traditional services with Digital Payment Technologies such as making the traditional Money Order service an Interoperable Banking service.
    • Any Market-led solutions that can promote ease of transaction and ease of living for customers.
  • The intersection of technology with financial services will open a new set of business opportunities.
  • Fincluvation will help to create a platform that can provide an opportunity for start-ups to work together with the Government.
    • It will also help them in understanding the needs of the underserved customers and innovate products or services according to their needs.
  • Fincluvation will help to create and deliver people-centric products or services that will promote a positive impact on their lives in a cost-effective manner.

 

India Post Payments Bank

  • India Post Payments Bank is a 100% central government-owned entity under the Department of Posts (DoP), a department under the Ministry of Communications.
  • Background:
    • In 2015, the India Post received the licence from the Reserve Bank of India to operate a payments bank.
    • In 2016, the India Post was registered as a public limited government company for setting up a payments bank.
    • In 2018, the Union Government approved a fund of ₹1,435 crores for setting up the India Post Payment Bank.
  • The Payment bank was started with the vision to build the most accessible, affordable and trusted bank for the common man in India.
  • The main objective is to promote financial inclusion in a simple and secure manner at the customers' doorstep.
  • It aims to utilize nearly 1,60,000 post offices as access points and 3 lakh postmen and Grameen Dak Sewaks to provide doorstep banking services.
  • It delivers simple and affordable banking solutions through innovative interfaces available in 13 languages.
  • Services offered by the Bank:
    • It offers savings accounts, money transfers and insurances through the 3d parties, bill and utility payments.
    • The Bank offers savings and current accounts up to a balance of ₹2 Lakh.
    • Customers can use QR code payments eliminating the need to remember account numbers, PINs and Passwords.
    • Unified Payments Interface (UPI)
    • Immediate Payment Service
    • National Electronic Funds Transfer
    • Real-time gross settlement
    • Bharat BillPay
    • Direct Benefit Transfer
    • RuPay Debit Card
    • AEPS (Adhaar Enabled Payment Service)
  • According to the data released in January 2022, the India Post Payment Bank had crossed the landmark of 5 crore customers.

 

Financial Inclusion

  • It means the availability and equality of opportunities to access financial services.
  • It refers to a process by which individuals and businesses can access affordable financial Products and Services. These include Banking, loan, Insurance Products, etc.
    • Providing access to banking, investment, Pension, Insurance and Credit (loan) facilities to each Citizen.
  • Benefits
    • Promote Economic Growth and Poverty alleviation.
    • Ensures Social, Economic and Transaction Security.
    • Improves Social Harmony.
    • Women Empowerment.
  • Steps Taken to Promote Financial Inclusion;
    • Nationalization of Banks
    • Lead Bank Scheme
    • Regional Rural Bank (RRB)
    • RBI rules for Commercial banks to set up at least 25% of their branches in unbanked rural areas.
    • RBI Permitted Banking Business Correspondent Agents.
    • Jan-Dhan Yojana
    • Small Finance Banks and Payment Banks.
    • India Post Payment Bank

 

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1818635