 "India Post keen to apply for a universal bank licence")
The Department of Posts (DoP), which has been planning to apply for a payment bank licence, believes it should be given a universal banking licence because it has been already carrying out the work of a payment bank.
Pradipta Kumar Bisoi, chief postmaster general, Maharashtra Circle, DoP, said: “We are already a payment bank, considering what we do, and there is not much difference between what we do now and a payment bank. So we now want to become a full-fledged bank.”
He added the DoP had also set up a committee three months back, which is being headed by former Cabinet Secretary T S R Subramanian to advise it on the future course of action regarding banking licences. The suggestions of the committee are expected in the next few weeks.
G S Sandhu, the then financial services secretary, had said in September: “The Department of Posts may be considered as a payment bank and they are working towards that. The problem with post offices is that they handle only one-side of banking, that is, the deposit side; but they don’t handle the credit side. So, by making them a payment bank, they will be able to work in that area they are best at. That may happen soon.”
According to the proposals, payment banks would be allowed to accept deposits, facilitate remittances and payments, but they can’t lend. They are also expected to offer only demand deposits — current account and savings deposit products — and not fixed deposits.
Last year, India Post had applied for a universal banking licence, too, but was not granted one by the Reserve Bank of India. The telecom ministry had backed India Post’s ambition to become a full-fledged bank, but the finance ministry was not keen, given the government’s financial burden. IDFC and Bandhan were granted a universal banking licence by RBI.
Pradipta Kumar Bisoi, chief postmaster general, Maharashtra Circle, DoP, said: “We are already a payment bank, considering what we do, and there is not much difference between what we do now and a payment bank. So we now want to become a full-fledged bank.”
He added the DoP had also set up a committee three months back, which is being headed by former Cabinet Secretary T S R Subramanian to advise it on the future course of action regarding banking licences. The suggestions of the committee are expected in the next few weeks.
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Even though the DoP is nursing the ambition of becoming a universal bank, the finance ministry believes the organisation is more suited for becoming a payment bank.
G S Sandhu, the then financial services secretary, had said in September: “The Department of Posts may be considered as a payment bank and they are working towards that. The problem with post offices is that they handle only one-side of banking, that is, the deposit side; but they don’t handle the credit side. So, by making them a payment bank, they will be able to work in that area they are best at. That may happen soon.”
According to the proposals, payment banks would be allowed to accept deposits, facilitate remittances and payments, but they can’t lend. They are also expected to offer only demand deposits — current account and savings deposit products — and not fixed deposits.
Last year, India Post had applied for a universal banking licence, too, but was not granted one by the Reserve Bank of India. The telecom ministry had backed India Post’s ambition to become a full-fledged bank, but the finance ministry was not keen, given the government’s financial burden. IDFC and Bandhan were granted a universal banking licence by RBI.