The cost to set up and run operations far outweighs the benefits for the payments bank
Government today cleared proposal to set up India Post payments bank with a corpus of Rs 800 crore and has plans to have 650 branches operational by September 2017, Telecom Minister Ravi Shankar Prasad said today.
When the RBI commenced the licencing process for payments banks, the idea was to offer one more layer of payments services to the yet-to-be banked in the country.
They are the second applicant to withdraw from the licence after Cholamandalam group pulled out of payments banks race a couple of months back
Payments bank of Department of Posts is likely to become operational by March 2017, Communications and IT Minister Ravi Shankar Prasad said today
Perhaps, it would have made more sense if Bandhan chose to become a small finance bank, since such an entity perfectly fits into the stated scope and objectives of the organisation
Payments bank licence will allow companies to collect deposits (initially up to Rs 1 lakh per individual), offer Internet banking, facilitate money transfers and sell insurance and mutual funds.
When contacted, a senior official of the postal department too denied any connection with the website/blog
The government is looking at taking the legislative route, by next month, to finalise the setting up of Postal Bank of India and will soon approach RBI to consider the postal department's application for banking licence.
Giving large value corporate loans shouldn't be the focus of PBI for its own good
India Post is best suited to offer delivery services to e-commerce players, given its wide reach across rural, urban and semi-urban areas.
The final guidelines on differentiated banks, spelled out by the RBI has paved the way for India post to fulfill its long-cherished dream of wearing the hat of a banker.<br />
These banks are expected to bring in a large chunk of the public, especially in rural areas and other places with low penetration, into the formal banking system
The Postal department has been fighting hard to enter the banking space, but has consistently failed to do so, caught up in a bitter, long-drawn battle with the finance ministry. Part of the reason why Postbank wants to become a bank is improving its financial prospects.
The Reserve Bank of India (RBI) on Thursday spelled out norms to set up payments banks in India that will give a major push for financial inclusion, or the process of spreading banking services in the unbanked segments, in Asia's third largest economy.