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No “Conditions Apply” in India Post Payments Bank Says IPPB CEO

Our USP is door-to-door banking with help of postman: IndiaPost Payments Bank CEO

IndiaPost Payments Bank, which is set to launch operations soon, will follow a bottoms-up approach, targeting people who either have feature phones or no mobiles at all.

In his first interview after taking over as the CEO of IndiaPost Payments Bank, Ashok Pal Singh tells ET's Surabhi Agarwal that the idea of the bank will be to simplify and universalise payments. Excerpts:

You rolled out a few pilots; what is the timeline for the launch?
We started in Ranchi and Raipur, and our concept is to have a district office in each district. The idea is that the branch office in a district will map all the post offices, urban and rural, in that area.

The idea is to test this model out through the pilot. We are hoping that by September we will start operations in at least 650 districts of the country.
What is going to be your target audience?

The core of our audience is the 500 million who use feature phones and we are currently testing how familiar they are even with the basic banking products -are they comfortable with it or do these need to be simplified?

How do you plan to differentiate your offerings?

Something that many others are doing but we want to pilot here is paperless account opening. Something that others are not doing but might emerge as our USP is door-to-door banking with the help of the postman.

Plus, simplified payment solutions for the masses is what we will be targeting, both for these feature phone users and around 350 million who are below that -who are without any phone at all. The payments bank will depend on third party fee-based services because the way in which the regulator has put it, you can't make money on anything else.

How do you look at the intense competition in the space from players such as Paytm and Airtel Payment Bank?

We are looking at a bottoms-up approach because our so-called competitors will start skimming the market. Let them do it. We will attempt to broaden and deepen the market from below.

That may not be as great a commercial proposition as skimming the market, but we believe that once we broaden and deepen it, there is a larger objective which is also being served and ultimately everyone will benefit including the so-called competitors.

We are not positioning ourselves as competitors because we are funded out of public money, and typically government should not be competing with its corporates, because they are ours. it's still a win-win for India.

Some of your competitors are offering interest rates as high as 7.5%. How do you plan to match it?

I have nothing to say on how they are doing it. But in any case, they have private money at their disposal. All my funding is from the government which is public money. Which is Rs 400 crore equity, Rs 400 crore grants. I have no means to do that and these are going to be short-term in any case.

Someone who says that you get that fancy rate of interest immediately puts an asterisk saying conditions apply. We also want to put an asterisk which says no conditions apply. Because if we have to live off the brand of the post office, it has to be about integrity and trust.