The Department of Posts (DoP) will soon seek Cabinet approval for Rs 240 crore for setting up Post Bank of India.
The DoP has plans to set
up Post Bank of India under payments bank licence. The Reserve Bank of
India has already issued licensing norms for niche banks -- payments
banks and small banks.
The DoP, which has
applied for a payments bank licence, has a hybrid model in mind to
operate Post Bank of India. Reserve Bank Governor Raghuram Rajan
yesterday had said while the banking sector is set to undergo changes in
the next few years, "we are going to possibly have postal bank".
"The Department is in
the process of seeking approval for about Rs 240 crore from Expenditure
Finance Committee which will then need nod from Cabinet," an official
source told PTI.
As per RBI guidelines,
payments banks would offer a limited range of products such as demand
deposits and remittances. They will not be allowed to undertake lending
activities and will be initially be restricted to holding a maximum
balance of Rs 1 lakh per individual customer.
They will be allowed to issue ATM or debit cards as also other prepaid payment instruments, but not credit cards.
According to a source,
Communications and IT Minister Ravi Shankar Prasad has approved hybrid
model suggested by Ernst & Young which prepared detailed project
report on Post Bank of India (PBI).
"E&Y has come out
with three models but suggested preference to a hybrid model. Under
which about 600 branches will directly operated by PBI staff in post
office premises and transactions in other parts of the country will be
supported by India post staff," the official said.
Post Bank of India is
proposed to have its own employees and IT infrastructure. The
transaction handled by India Post , employees will be entered in to
computer server of PBI.
The Department expects revenue of over Rs 550 crore from PBI in first 5 years.
"India Post will earn
from every transaction it will carry out for PBI and rents that it will
get from its branches. India Post financial services like saving
account, postal life insurance will continue as it is," the official
said.
The DoP will evaluate
its five year performance as payments bank and then it will take call of
setting up full fledged banking service.
Source : http://www.business-standard.com/article/pti-stories/dop-to-seek-cabinet-nod-for-240-cr-to-set-up-post-bank-115041200142_1.html
