 "India Post Payments Bank to be a reality")
India Post Payments Bank (IPPB) will be set up as a public limited company under the Department of Posts with 100 per cent government equity. The Cabinet approved a proposal in this respect on Wednesday.
The total corpus of the payments bank is of Rs 800 crore, which will have Rs 400-crore equity and Rs 400-crore grant.
Telecom Minister Ravi Shankar Prasad told reporters after the Cabinet meeting that 650 branches of the postal payments bank would be established in India, which will be linked to rural post offices.
India has 154,000 post offices, of which 139,000 are rural post offices. IPPB will obtain banking licence from the Reserve Bank of India (RBI) by March 2017 and by September 2017, all 650 branches of the postal payments bank would become operational.
Its services will be available across the country through these 650 payments bank branches, linked post offices and alternative channels, riding on modern technology including mobiles, ATMs and simple digital payments.
“This we had planned for three years, but now we will be doing it in a year,” said Prasad. He added that the payments bank, which will be run by a Chief Executive Officer, would be professionally managed and there would be a representation from various other government departments including the Department of Posts, Department of Expenditure, etc.
He said all ‘grameen dak sevaks’ in rural post offices would be given hand-held devices by March 2017.
“We are reinforcing it further. I have had discussion with my officers to give iPad and smartphones to postmen in urban post offices,” said Prasad.
At present, the core banking network of post offices is more than that of the country’s largest lender State Bank of India (SBI).
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SBI has 1,666 core banking branches while 22,137 post offices now have core banking facility. All citizens, including 40 per cent of the country’s population that is outside the ambit of formal banking, will benefit from this project. The project will be rolled out in the entire country in a phased manner, he said.
The proposal will further the cause of financial inclusion by providing basic banking, payments and remittance services and facilitate financial services such as insurance, mutual funds, pensions and access to credit in tie-up with third-party financial providers with special focus on rural areas and the un-banked and under-banked segments.
It will generate new employment opportunities for skilled banking professionals and create opportunities for propagating financial literacy across the country. Setting up of the IPPB to further the financial inclusion was one of the budgetary announcements during 2015-16. The Department of Posts had obtained the ‘in-principle approval’ of RBI in September 2015 to set up IPPB.
