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.
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