IPPB Charges- Cash, Withdrawal, AePS transaction charges list

Hey friends, recently India Post Payments Bank introduced IPPB charges on cash transaction and AePS transactions. 

India Post Payments Bank IPPB Charges list 

As per the market practices and keeping in mind optimum pricing for the products and services offered by the bank, to balance the objective of the bank’s profitability while providing the best services to the customers without letting someone take undue advantage of NIL pricing and put a strain on the bank’s operations, Executive Level Risk Management Committee(ELRMC) of the Bank has approved the introduction of charges on following services in the quantum as mentioned in the table below.

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IPPB Cash Transaction charges

• Basic Savings IPPB Account- Cash Withdrawal IPPB Charges- Free up to 4 transactions per month- Post free limit, 0.50% of the value subject to minimum Rs. 25 per transaction.
• Basic Savings IPPB Account- Cash Deposits IPPB Charges- Free- No charges.
• Savings (other than Basic Account) & Current IPPB Accounts- Cash Withdrawal IPPB Charges- Free, up to Rs. 25000 per month- Post-free limit, 0.50% of the value subject to minimum Rs. 25 per transaction.
•  Savings (other than Basic Account)& Current IPPB Accounts- Cash Deposits IPPB Charges- Free, up to Rs. 10000 per month- Post-free limit, 0.50% of the value subject to minimum Rs. 25 per transaction.

IPPB AePS Transaction charges

• Free Limit for AePS transactions- Free Unlimited transactions over IPPB network (Acquirer transactions): Non-IPPB customer served by IPPB network- Up to 3 Transactions over Non-IPPB Network (Issuer Transactions) per month (including AePS Cash Deposit, Withdrawal and Mini-Statement): IPPB Customer transacting on other Network.
• AePS Cash Deposit- Post free limit, Rs. 20 per transaction.
• AePS Mini Statement- Post-free limit, Rs. 5 per transaction.
• AePS Fund Transfer- 1% of transaction amount subject to a minimum of Rs. 1 and maximum of Rs. 20 per transaction
• Aadhay Purchase Pay- Free

The above IPPB charges are exclusive of GST/ CESS which will be levied at the applicable rates.

As per regulatory guidelines, Customers have been informed through SMS about the proposed changes in advance. A schedule of proposed changes with a date has been put on the website as well.

These charges would be made effective starting from 1st April 2021 only and charges will be applied/recovered centrally.

Illustration of IPPB Charge scenarios:

IPPB AePS Charges- If a customer undertakes 1 AePS cash withdrawal and 2 Mini statements over the Non-IPPB network, the free limit for the month will be exhausted and any additional transaction over the Non-IPPB network will attract a charge as per Transaction type.

IPPB Cash Charges- If a customer (Non-BSBDA Scheme) attempts the very 1st transactions of the Months of Rs 27000 cash withdrawal- Charge to be levied as Free limit of 25000 exhausted. Will be charged at Rs 25 + GST.

If a customer (Non-BSBDA Scheme) has already undertaken a cash deposit of RS 9500 in the month and attempting to deposit Rs 7000 in cash - Charge to be levied as a Free limit of 10000 exhausted. Will be charged at Rs 32.50/- + GST (0.5% on Rs 6500/-)

If a customer (BSBDA Scheme) has already withdrawn 4 times in the month, each withdrawal of say Rs 15000/- and attempts to withdraw fifth time for Rs 2000/- in the same month. Free limit of 4 transactions exhausted. Will be charged at Rs 25/-

The rationale for introducing proposed IPPB charges

Cash Transactions- Basis analysis of ongoing Cash withdrawal transactions, it was observed that only 4% of all Cash withdrawals are above 10,000 in a month and such transactions are originated only by less than 0.1% of our customer base. Despite this negligible impact on a very minuscule customer segment, Bank has proposed to keep Cash withdrawals free up to a sum of Rs 25,000/- per month. Only Transactions cumulating above the threshold of Rs 25000 are proposed to be charged.

Similarly, only 2% of all Cash deposits cumulated for a month are above 10,000. Such customers as a percentage of our customer base is a tiny 0.2%.

Proposed India Post Payments Bank charges will help deter such customers who undertake high volume cash deposit in SB account due to existing charges being levied in Current account and attempt to route business transactions through saving account. This also encourages customers to use, more frequently, ubiquitous digital channels made available. The free services are also being misused by some players for cash burial and cash availability. Charging for these transactions is also a market practice.

AePS Transactions- AePS services were thrown open to customers of all Banks participating in the AEPS network to leverage the expansive reach and network of IPPB across the length & breadth of the country. The services have gained massive acceptance specifically beneficiaries of the Government’s social benefits schemes and subsidy payments. 

While our offering has been a huge success and scaling new milestones with every passing month, the services have been subject to misuse and abuse also to an extent by Business Correspondents (BCs) of various other banks. Some of the common malpractices prevalent in the market include Transactions Splitting, Round tripping, Circular movement of funds. 

All these results in an extraordinary cost for IPPB which has to part with higher interchange payouts to other banks, pulling down the overall profitability of AePS as a product.

With unlimited Free transactions over a vast network of IPPB Access points, AePS continues to remain absolutely free for all customers if availed at one of the Bank’s access points. But given the fact that access points have certain restrictions on being operational round the clock, and customers may have urgent needs, up to 3 transactions per month have been permitted free over the Non-IPPB network of BC’s.

Circle and Branch offices are requested to convey the real purpose and very negligible customer impact of the proposed charges to End users.