After Bharti Airtel and Paytm, State-owned India Post Payments Bank kick-started its operations by beginning its pilot services in both Raipur and Ranchi on Monday, offering attractive interest rate upto 5.5 per cent for its depositors. The payments bank expects to expand its footprint to over 650 branches across the country by September 2017.

India Post has become the third entity to receive a final license last week from the Central Bank to start its payment bank operations. Country’s largest telcom service provider Bharti Airtel and digital payments firm Paytm are the other two to have received the license while only Airtel has started operations so far.

The payment bank was launched simultaneously in Raipur and Ranchi over a video conference by Union Finance Minister Arun Jaitely in presence of Telecom Minister Manoj Sinha and other dignitaries there in.

Hoping the payment bank a great success, Jaitely said, “By September 2017, it will spread all across the country. It will reach all doorsteps in rural India to cater the banking need of the people of India. As ‘dakiyas’ or postmen are identity of delivering all the Government information, I hope lakhs of postmen will convert themselves into banks and small depositors will compete with the normal banking system in the future.”

However, India Post Payments Bank (IPPB) Chief Executive Officer (CEO) AP Singh, appointed by the Government recently, said, “The bank will offer an interest rate of 4.5 per cent on deposits up to `25,000; 5 per cent on deposits of `25,000-50,000 and 5.5 per cent on `50,000-1,00,000. The Government has sanctioned `800-crore equity for the Payments Bank, of which it has already infused `275 crore.”

“The 650 branches will be umbrella branches that will map all the 1.55 lakh post offices in the country. Also we will progressively put smartdevice with each of the 3 lakh postmen,” Singh added.

IPPB is the third entity to receive payments bank permit after Airtel and Paytm. Airtel has launched its commercial operation across India with an investment of `3,000 crore offering interest rate of 7.25 per cent on deposits, free money transfer from Airtel to Airtel numbers within Airtel Bank, money transfer to any bank account in the country.

Paytm, promoted by Vijay Shekhar Sharma and backed by Chinese e-commerce major Alibaba, plans to roll out payments bank with initial investment of about `400 crore.

Asked about Airtel Payments Bank offering attractive deposit rate, Singh said, “It is public money which is building India Post Payments Bank. The Governments don’t compete with corporates, they can scheme the market, we will nurture it from below. Our primary role is to deepen and broaden the market.”