Home / Industry / Banking /  India Post payments bank to be operational from March 2017

Hyderabad: The payments bank of India Post will start functioning from March 2017 and serve as a wider platform to implement financial inclusion programmes, information technology and communications minister Ravi Shankar Prasad said on Sunday.

“We are going to start the postal payments bank by March 2017. Very soon we will go to the cabinet," Prasad told reporters.

He said the proposed India Post payments bank will have an immense potential to sell third-party products and services. About 50 companies and institutions, including some from abroad, are keen to partner with the postal department for the payments bank, such as World Bank, Citi and Barclay’s, the minister said.

Responding to a query, he said these institutions will offer third-party services such as insurance products, mutual funds, banking instruments and a variety of financial instruments.

On the interest shown by them (companies), Prasad said, “...That the board will decide; I’m only saying value addition by postal department is attracting so much global attention. They (the board) will decide how much to give them. It is a call they will take."

The payments bank of the postal department will become a big platform of financial inclusion, he added.

“We are going to invest about 800 crore— 400 crore will be invested by the department and the remaining amount will be equity part (mobilised as equity)," he said.

“The postal department has the widest network in India. We have 1,54,939 post offices in the country; out of that 25,560 are departmental post offices and 1,29,379 are branch post offices," Prasad said.

“Under Narendra Modi, we have decided to re-energize the postal department for India’s growth and financial inclusion," he said.

In August 2015, the Reserve Bank of India gave in-principle approval to 11 entities to start payments bank, including the postal department. The approval is valid for 18 months and all the entities are required to submit a detailed business plan, after which they would be given the final nod.

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