Initially, the target was to create the architecture in three years but today at the cabinet meet, Prime Minister Narendra Modi asked the minister to finish work by September next year. The bank will have an initial corpus of Rs 400 crore.
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Currently, India has about 154,000 post offices, out of which 139,000 are in rural India.
The domestic players in the fray for partnering India Post include NABARD, HSBC, Allahabad Bank, Indian Overseas Bank, Kotak Life Insurance, HDFC, PNB Metlife, ICICI Lombard, ICICI Prudential, and Bajaj Allianz, while the worldwide ones, apart from Deutsche Bank, Barclays, Citi and Templeton, include Transport USA for renting solutions, Western Union, ClearSecurity and Japan’s Hitachi.
Payments banks offer small savings accounts, as also remittances and mobile and net banking services, notably to migrant labour workforce, low-income households, small businesses and other unorganised sector entities.
The Indian government has cleared a proposal for the India Post to launch payments bank services by March 2017. The India Post ATM has now reached 942 as on May 2016 and plans are to reach 4,000 ATM by March 2017.
However, leveraging the large physical network of the postal department has its own challenges.
Once each of these post-offices would start offering banking operations, then it would unleash a new wave of financial inclusion never witnessed in India.
It will also provide access to credit in tie-up with third party financial providers with special focus on rural areas and the unbanked and under-banked segments.
He said, “It’s going to be a game changer”.
Unparallel Core Banking Network: India Post has the highest number of core banking branches in India and has even surpassed State Bank of India core banking branches.
They can also accept demand deposits up to a maximum of Rs 100,000 per individual customer, issue ATM/debit cards and act as agents for simple financial products like mutual fund units and insurance. It will be further bolstered by linked post offices and alternative channels.
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More than 50 national and global banks, insurance companies, money transfer organisations are keen to tie-up with India Post Payments Bank.
