India Post Payments Bank to start selling MF, insurance products by Mar '18

India Post Payments Bank (IPPB) will start selling mutual funds and insurance products of other companies by early 2018 and is open only to "non- exclusive" tie-ups, its Chief Executive A P Singh has said.

Nearly 100 firms, both domestic and foreign, have evinced interest in partnering the government-promoted IPPB.

In an interview to PTI, Singh said that IPPB will start full-fledged operations in every district of the country by September 2017. The bank had launched its pilot project with a branch each in Raipur and Ranchi on January 30 this year.

Asked about plans to diversify and sell third party products through its platform, Singh said he is looking at offering only those products which customers can easily understand.

"We will sell third-party products, but it is a question of biting as much as I can chew. We basically will provide a platform and the idea is to open it to everyone on a non-exclusive basis," he said.

Singh said the IPPB will curate third party products before selling it so as to ensure that it is simple for customers.

Also, there would not be any training of staff necessary as no individual product of any specific company is to be sold.

Asked when the IPPB would be ready to sell third party products, Singh said "by first quarter of calendar year 2018 it should be there".

As per RBI norms, Payments banks have to focus on providing basic financial services, including social security and utility bill payments, remittance functions, and can mobilise deposits of up to Rs 1 lakh.

Also, they can distribute insurance, mutual funds and pension products, and act as business correspondent for other banks for credit products.

As many as 100 entities including IDBI Bank, HSBC, Axis Bank, Deutsche Bank, Barclays Bank, Citibank, SBI and LIC have evinced interest in partnering with IPPB for various functions given the unmatched rural reach India Post has.

The list of insurance companies which have approached the payments bank include HDFC Life, ICICI Prudential, Max Life Insurance and Bajaj Allianz Life.

"I don't want to get into selection bias or exclusive relationships. I am clear that I am built by public money, I am offering a public platform and I don't want to appropriate the Post Office exclusively for a particular company. This infrastructure must remain open for everyone," Singh said.

He said IPPB's sales force would not advise customers on third party products and instead offer just a table depicting the returns that a simple group term insurance product or an Index Mutual Fund would offer to a customer.

"The thumb rule is if you sell you don't advise, if you advise you don't sell. We will basically be selling, we won't be advising. You cannot both advise and sell, it is a conflict of interest," Singh said.

As part of its expansion drive, IPPB plans to open 650 new branches by September. The Postal Department at present has a network of 1.55 lakh post offices and the new branches will be set up within the them.

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