India Post in Talks with BSNL to Use its Platform for Payments Bank

India Post is close to striking a pact with state-run telecom company Bharat Sanchar Nigam Limited (BSNL) to use its platform to roll out payment bank services and launch them by March 2016. It is also open to aligning with private telcos like Bharti Airtel and Vodafone India.


“BSNL is our preferred partner but we are also in talks with Bharti Airtel and Vodafone. We are in advance talks with BSNL. However, we are yet to work out on operational issues,” said MS Ramanujan, member (banking), India Post.


A top BSNL official also confirmed that they are in talks with India Post but are yet to work out the revenue sharing model. “We are not investing anything in the payment bank services of India Post. There is no capex. They will benefit from the technology and expertise we have and that we would deliver,” said a BSNL official.

The postal department has already moved a Cabinet note for approval of Rs 650 crore as investment in the proposed payments bank. “We will need at least Rs 100 crore as equity capital and Rs 200 crore for setting up the payment bank,” he said

Ramanujam, who has been given the task to formulate and lead the payment banking services for India Post, also said that though RBI has not given any formal deadline for seeking final approval for payment banking licence, they plan to submit a final report to RBI in next two months.
“RBI has given us an in-principle approval and we will submit our report to the central bank on how we intend to move forward towards establishing the payment bank. It could take a  month or two for RBI also to formally give us a licence. We expect to get a formal approval from RBI before the year-end,” Ramanujan explained.

India Post plans to start payment banking services in all its 1.55 lakh postal branches at least before the end of this financial year by March 2016.

“We are also going to offer hand-held devices at all village post offices (around 1.55 lakh)… The devices will basically be a sim card and GPRS based. As per RBI guidelines, we must have 25% of the touch points in backward and left wing extremist areas, where we already have post offices,” he added.

He said India Post will convert at least 25,000 of its branches to core banking services (CBS) by March next year.


The government is also moving ahead with its plan to rope in professionals from the private sector for top positions of Post Bank of India (PBI), its proposed fully-owned payments bank.
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