The Department of Post (DoP) has received clearance for funds from the Public Investment Board (PIB) for the payments bank.
The Department of Post will launch its payments bank by January next year and top management of the new-age venture would be in-place by July, a senior official said on Wednesday.
The Department of Post (DoP), along with 10 other entities, received in-principle approval from RBI to launch payments banks in August last year. The 'in-principle' approval is valid for a period of 18 months.
"We (India Post Payments Bank) hope to hit streets by year-end or January next year because time for us is also very tight. Out of 18 months, we have have lost six months," India Post Member for Banking and HRD, M S Ramanujan said at an event to mark 15 years of partnership with Western Union.
He said that India Posts will hire personnel from outside as well as deploy some of its existing workforce for the payments bank to be named as India Post Payments Bank (IPPB).
"The top management of the IPPB should be in place by July," Ramanujan said. While granting in-principle approval, RBI had said that applicants would have to comply with the requirements under the Guidelines and fulfil other conditions during 18 months.
On being satisfied that the applicants have complied with the requisite conditions, the central bank would consider granting to them a licence for commencement of banking business, it had said.
The DoP has received clearance for funds from the Public Investment Board (PIB) for the payments bank. It is in process to seek approval of the Cabinet Committee on Economic Affairs for setting up of the IPPB.
The IPPB is also likely to facilitate payments of central and state governments as well as municipal dues and fees of various universities and educational institutions.
Ramanujan said that payments bank business will have positive impact on partnership with money transfer firm Western Union but there is a need to evolve new services to transform this partnership.
"Essentially payments bank will be handling remittances both domestic as well international. Payments Bank will be leveraging entire postal network. We are going to be only 1 in each district. In five years, we may not have more than 650 branches. We have to look at partnership that we are going to have when payments bank is launched," he said.
Western Union, which has permit for remittances from abroad to people in India, said that the company is looking to be omni-channel for money remittances across mobile, online and physical platform by 2020.
"We are integrating our service for transmitting directly into account of IPPB customers. It should be done within 3-6 months. Currently, WU is allowed to remit money at a fixed location but we are in discussion if it can deliver money at doorsteps," Kiran Shettly, Managing Director and Regional Vice President for India and South Asia said.
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