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The India Post Payments Bank (IPPB) traces its genesis to a license granted by the Reserve Bank of India (RBI) to India Post in August 2015 to operate a payments bank. Registered as a public limited government company in August 2016, the bank's pilot project began in January 2017. The Union Cabinet formally approved the setup cost, and IPPB was officially launched by the Prime Minister on September 1, 2018, leveraging the extensive network of the Department of Post, Ministry of Communications. It opened with a first phase that included 650 branches and 3,250 access points, utilizing the services of postmen and Gramin Dak Sewaks as mobile bankers.

IPPB is a public entity, operating as a division of India Post and having 100% equity ownership by the Government of India. As a payments bank, it is a differentiated, non-full-service bank that is restricted from issuing loans or credit cards but can accept demand deposits (savings and current accounts) up to a balance limit (currently ₹2,00,000). Its general significance in the Indian financial system is its critical role in advancing financial inclusion, specifically targeting the unbanked and under-banked population, especially in rural and remote areas, by offering doorstep banking services. By harnessing the vast network of post offices, IPPB acts as a catalyst for delivering government Direct Benefit Transfer (DBT) funds and promoting a less-cash and Digital India economy.