India Post expects to start
the first 50 branches of its payments bank by May 2017, seeking to widen
financial inclusion in the country.
As per the current plan,
India Post Payments Bank (IPPB) - as it has been termed will eventually have
650 branches across the country.
While the first set of
branches will open by May, the remaining will start operations by September
2017, a top official of the Department of Posts said.
The department hopes to
submit a final proposal to the Reserve Bank of India by February, ahead of the
March 2017 deadline, after it has the required management and technology in
place, SK Sinha, secretary, Department of Posts, told .
The RBI gave in-principle
approval to 11 applicants in August last year, including the Department of
Posts, Aditya Birla Nuvo, Airtel M Commerce Services, Fino PayTech, National
Securities Depository, Reliance Industries, Tech Mahindra and Vodafone m-pesa,
for setting up payments banks. Three of the 11 entities have decided to back
out, citing unviability.
India Post, with a network
of about 155,000 post offices, will hire almost 2,000 people for the payments
bank operations.
"There will be nine
board members, five from outside and four internal people from the department,
including the CEO," said Sinha.
The department is
contemplating whether it can form its own search and selection committee to
appoint a CEO or rely on the standard procedure followed by public sector banks
for top-level appointments.
The department has written
to state-owned banks seeking nominations. Sinha said the State Bank of India
has responded with some names.
"For the next rung of
leadership such as the chief financial officer, chief operating officer and
chief technology officer, we are forming an internal committee," he said.
The government has approved Rs 400 crore equity and Rs 400 crore grant for
IPPB.
Alibaba-backed Paytm is
the other or payments frontrunner for payments banks in India and has drawn up
a largely branchless model.
Sinha said that India Post
is looking at catering to the unbanked population of the country with the idea
of opening one branch in almost every district of the country.
"Most of the other
players may not be even thin king of the areas that we want to service,"
said Sinha. The plan is to have most of the banking features such as money
transfer and internet banking, apart from offering credit (in partnership with
other banks or institutions), along with financial products such as mutual
funds.
Sinha is betting big on
the government's direct benefits transfer scheme to drive transactions, with
welfare payments being deposited in the bank accounts of consumers.
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