Millennium Post
Business

Post Bank funds issue will be placed before Cabinet: Sibal

The Communications and IT Ministry will move the Cabinet to seek approval for funds needed to run banking operations of India Post in case the department gets a licence from the RBI.

Sources said that the postal department had requested the Finance Ministry to allot funds of Rs 623 crore to finance proposed banking debut but that has not been approved yet. Telecom Minister Kapil Sibal said, ‘We are just awaiting Reserve Bank of India’s decision and then we will go to the Cabinet.’

Asked about the possibility of a banking licence in absence of funds, he said, ‘That issue is yet to come to the Cabinet. In principal, if Reserve Bank of India allows us licence for Post Bank, then it will have to go to the Cabinet because funds are required. We will see in the Cabinet what happens.’

The Department of Posts (DoP) lowered its estimate of funds for running banking operations to about Rs 623 crore from earlier projection of about Rs 1,900 crore. The proposal for Rs 623 crore includes Rs 500 crore as paid-up capital under RBI’s new banking licence norms. Another Rs 123 crore is for infrastructure that is needed to comply with the new norms. The DoP has applied for a banking licence. The RBI is working on names of shortlisted entities which are yet to be announced.
Next Story
Share it