Govt to invest Rs 800 crore to set up India Post payments bank
The payments bank will go operational by March 2017, Ravi Shankar Prasad said.
The Union Minister of Communications & Information Technology, Ravi Shankar Prasad on Sunday said that Centre will invest Rs 800 crore in India Post’s payments bank which will begin functioning from March 2017.
This payments bank will serve as a wider platform to implement Prime Minister Narendra Modi's financial inclusion plans, Prasad said.
"We are going to start the postal payments bank by March 2017. Very soon we will go to the Cabinet and postal payments bank will become operational from March 2017," Prasad said.
We will "invest about Rs 800 crore -- Rs 400 crore will be invested by the department and the remaining amount will be equity part (mobilised as equity)," he added.
So far, the World Bank, Citi, and Barclays have come forward to partner with India Post to set up the payments bank. "...the board will decide, I'm only saying value addition of postal department it is attracting so much global attention...they will decide how much to give them. It is a call they will take," he clarified.
The minister said that the India Post payments bank will help in selling third-party products and services.
In a response to a query, Prasad said payments banks will offer third party services like insurance products, mutual funds, banking instruments and a variety of other financial instruments.
"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," he said.
In August 2015, the RBI had given an in-principle approval to 11 entities to start payments bank, including the postal department. However, in the last three months, two entities -- Cholamandalam Finance and Dilip Sanghavi (Sun Pharama, IDFC Bank and Telenor JV for payments bank) have dropped out of the payments bank race.
The approval is valid for 18 months and all the entities are required to submit a detailed business plan after which they shall be given the final nod.
(With inputs from PTI)