New Delhi, April 9: In a major push to Prime Minister Narendra Modi’s Digital India initiative, around 34 crore post office savings account holders will be able to avail a full-fledged digital banking service from May 2018. The government has now approved linking of post office saving accounts with that of India Post Payments Bank (IPPB ) for hassle-free cashless transactions across the nation. “This will enable post office account holders to transfer money from their account to any bank account,” an official source said.

The recent move also paves the way for creating of India’s largest banking network as India Post has plans to link all 1.55 lakh post office branches with the IPPB. According to a report by PTI, the finance ministry has approved linking of savings bank accounts at post offices with IPPB accounts. This will enable post office account holders to transfer money from their account to any bank accounts”. The report states that the 34 crore savings accounts comprise 17 crore post office savings bank accounts and rest are those subscribed monthly income scheme, recurring deposits etc.

India Post has started core banking service but it offers money transfer service within post office savings bank (POSB) accounts. "IPPB is governed by Reserve Bank of India and banking service of post offices comes under the finance ministry. IPPB customers can use NEFT, RTGS and other money transfer services as available for any banking customers. Once POSB accounts are linked with IPPB, customers will be able to enjoy all money transfer service like other banks," the source was quoted by PTI.

By May, India Post will give option to POSB account customers to avail this facility. "The service will be optional. If post office account holders opt for it, their account will be linked to their IPPB account," the source said. As per an official statement issued earlier, India Post plans to start functioning of all 650 IPPB branches from this month. All 650 branches will be connected to smaller post offices in the districts.

Reports state that IPPB will start registering merchants who will accept payment from its customer with help of the application. The IPPB customers will be able to make payments to various merchants like a grocery store, tickets etc with help of their app, the source said.

As per reports, IPPB branches and all the access points will be linked to the postal network which has 1.55 lakh post offices in total. Out of this, 1.3 lakh branches are in rural area. With 1.55 lakh branches, India Post will be able to create country's largest banking network. "In the second phase, starting September, account holders in post office will have an option to pay for post office products from their IPPB accounts including deposit money for Sukanya Samridhi Yojana, recurring deposits, speed post, etc," he said.

(The above story first appeared on LatestLY on Apr 09, 2018 12:58 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).