In a move that may give a boost to rural banking, the Postal Department is likely to get its payment bank licence by August from the Reserve Bank of India (RBI). Union Minister for Communications & Information Technology Ravi Shankar Prasad said on Saturday that he expects the Reserve Bank of India to grant the payment licence to the proposed Post Bank of India (PBI) by August.
The Reserve Bank of India’s approval will help in enabling the network of 1,54,000 post offices (including 1,30,000 rural post offices) to offer banking services to the masses in the country.
“We expect the Reserve Bank of India to give payment bank licence to Post (department) in August,” Prasad said in reply to a question during a Press meet organised to announce the launch of
Digital India Week.
Notably, in the last one year, the Department of Post (DoP) has networked 27,215 post offices into one national unit through computers. The Department of Post, which has applied for a payment bank licence, has a hybrid model in mind to operate Post Bank of India.
As per Reserve Bank of India guidelines, payment banks would offer a limited range of products such as demand deposits and remittances. They will not be allowed to undertake lending activities and will initially be restricted to holding a maximum balance of Rs 1 lakh per individual customer.
They will be allowed to issue automated teller machine or debit cards as also other prepaid payment instruments, but not credit cards.
Post Bank of India is proposed to have its own employees and information technology (IT) infrastructure. The transactions handled by India Post employees will be entered into the server of Post Bank of India.