Saturday, April 4, 2015

Postal Bank of India

Postal Bank of India

The government is to set up a Postal Bank of India by utilizing its 1,55,000 Post Offices across the country. Though the final structure is yet to decide, but it seems Postal banks will have a distinct structure from other Payment Banks and will compete with universal banks.

RBI Governor's speech at 80th anniversary of RBI

"In the coming year, we will have many new players in the banking eco-system, such as payment banks, small finance banks and possible a postal bank competing with existing universal banks, regional rural banks, cooperative banks, and a variety of non-bank finance companies", said RBI governor R. Rajan, outlining the developments in the central bank at an event to commemorate RBI's 80th anniversary.

Expected Structure

  • The government is planning a non-payments bank structure for Postal Bank of India
  • This will leverage the Postal Department's real estate infrastructure, vast distribution network (1,55,000 Post Offices across the country)
  • It will also facilitate Financial Inclusion plan

Note that the Postal Department has already applied for a payments bank licence after RBI initiated the licensing process last year. But it is expected that if it gets licence, Postal Bank will be a non-payments bank, or universal bank.

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