IndiaPost expects to start the first 50 branches of its payments bank by
May 2017, seeking to widen financial inclusion in the country.
As per the current plan, India Post Payments Bank (IPPB) - as it has
been termed - will eventually have 650 branches across the country.
While the first set of branches will open by May, the remaining will
start operations by September 2017, a top official of the Department of
Posts said.
The department hopes to submit a final proposal to the Reserve Bank of
India by February, ahead of the March 2017 deadline, after it has the
required management and technology in place, SK Sinha, secretary,
Department of Posts, told ET.
The RBI gave in-principle approval to 11 applicants in August last year,
including the Department of Posts, Aditya Birla Nuvo, Airtel M Commerce
Services, Fino PayTech, National Securities Depository, Reliance
Industries, Tech Mahindra and Vodafone m-pesa, for setting up payments
banks.Three of the 11entities have decided to back out, citing
unviability.
IndiaPost, with a network of about 155,000 post offices, will hire almost 2,000 people for the payments bank operations.
"There will be nine board members, five from outside and four internal
people from the department, including the CEO," said Sinha.
The department is contemplating whether it can form its own search and
selection committee to appoint a CEO or rely on the standard procedure
followed by public sector banks for top-level appointments.
The department has written to state-owned banks seeking nominations.
Sinha said the State Bank of India has responded with some names.
"For the next rung of leadership such as the chief financial officer,
chief operating officer and chief technology officer, we are forming an
internal committee," he said. The government has approved ` . 400crore
equity and `. 400-crore grant for IPPB.
Alibababacked Paytm is the other or payments frontrunner for payments
banks in India and has drawn up a largely branchless model.
Sinha said that IndiaPost is looking at catering to the unbanked
population of the country with the idea of opening one branch in almost
every district of the country.
"Most of the other players may not be even thin king of the areas that
we want to service,"sa id Sinha. The plan is to have most of the banking
features such as money transfer and internet banking, apart from
offering credit (in partnership with other banks or institutions), along
with financial products such as mutual funds.
Sinha is betting big on the government's direct benefits transfer scheme
to drive transactions, with welfare payments being deposited in the
bank accounts of consumers.
Source :The Economic Times
