Get all 650 India Post Payments Bank branches working in 1 year: Modi
Though, the decision has brought cheers for Union Telecom Minister Ravi Shankar Prasad, but the time limit given by Prime Minister Narendra Modi to make operational all India Post payment banks by September 2017, may worry him most.
However, Prasad was confident that all 650 branches of postal payment banks will become operational by September, 2017, despite the fact that he had planned to complete the project in three years starting from April 2017.
On the one-year timeframe, Prasad said, “I had planned to complete the project in three years, but the PM has asked to complete it by September 2017 and I’m very much sure that it would get completed before the stipulated time. It’s the result of the best efforts of Postal Department that we have successfully converted 22,000 post offices into core banking, which was just 250 in 2014.”
“By March next year we will launch payments bank of the postal department. It’s going to be a game-changer as there are 1.54 lakh post offices, including 1.39 rural post offices. Our network will be the largest in the world, much bigger than State Bank of India,” Prasad said.
Prasad also said that during the discussions for deciding the modalities, 60 international consortiums, including City Bank, World Bank, Barclays, had shown keen interest to partner India Post for third partner delivery for insurance and banking, among others.
Explaining about the challenges, a senior postal department official said, “Challenges are many as it’s not about just starting, but we have to make it fully operation. Since we have to utilise the infrastructure of postal department, including staff and other resources, changing the orientation of postal department staff towards banking culture would be a great challenge for us.”
The minister further said that the India Post payment bank will have a corpus of Rs 800 crore and 5,000 ATMs will be started for mobile and internet banking.
Payment banks will offer small-savings accounts and payments and remittances to migrant workforce, low-income households and others left out of the banking network. Payment banks, aimed at increasing financial inclusion, will not be allowed to lend money.
The minister said the payments bank, which will be run by a Chief Executive Officer, would be professionally managed, with representatives from some other government departments such pots, expenditure and economic services.
He also said that all ‘grameen dak sevaks’ in rural post offices would be given handheld devices by March 2017. “We are reinforcing it further. I have had discussion with my officers to give iPads and smart phones to postmen in urban post offices,” Prasad said.
At present, India Post has more post offices linked with core-banking software than the number of similarly networked branches of State Bank of India, the country’s largest lender. SBI has 1,666 core-banking branches, while 22,137 post offices now have core-banking facility.
“The India Post payment bank would generate new employment opportunity for about 3,500 skilled banking professionals. Most of the technology management and operations would be outsourced,” the minister said.