The
Department of Posts, which has applied for a payments bank licence, has a
hybrid model in mind to operate Post Bank of India. Reserve Bank Governor
Raghuram Rajan yesterday had said while the banking sector is set to undergo
changes in the next few years, "we are going to possibly have postal
bank".
According
to a source, Communications and IT Minister Ravi Shankar Prasad has approved
hybrid model suggested by Ernst & Young which prepared detailed project
report on Post Bank of India (PBI).
"E&Y
has come out with three models but suggested preference to a hybrid model.
Under which about 600 branches will be directly operated by PBI staff in post
office premises and transactions in other parts of the country will be
supported by India post staff," the official said.
Post Bank
of India is proposed to have its own employees and IT infrastructure. The
transaction handled by India Post employees will be entered in to computer
server of PBI.
The
Department expects revenue of over Rs 550 crore from PBI in first 5 years.
"India
Post will earn from every transaction it will carry out for PBI and rents that
it will get from its branches. India Post financial services like saving
account, postal life insurance will continue as it is," the official said.
The
Department of Posts (DoP) will soon seek Cabinet approval for Rs 240 crore for
setting up Post Bank of India.
The DoP
has plans to set up Post Bank of India under payments bank licence. The Reserve
Bank of India has already issued licensing norms for niche banks -- payments
banks and small banks.
As per RBI
guidelines, payments 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 be initially be restricted to holding a maximum balance of
Rs 1 lakh per individual customer.
They will
be allowed to issue ATM or debit cards as also other prepaid payment
instruments, but not credit cards.
The DoP
will evaluate its five year performance as payments bank and then it will take
call of setting up full-fledged banking service.
//copy//FNPO
