India Post Payments Bank
The Postal Bank of India (PBI) is an upcoming stated owned bank in India. The Indian government considering the legislative route, to finalise the setting up of PBI following which the RBI will be approached for the consideration of a banking license. A government set-up task force reported that India Post has around 6 lakh crore deposits, which is second only to India's largest commercial bank - SBI - and would thus make PBI the second largest bank once established[1].
History
The PBI was first mooted as far back as 2013 by the previous UPA government. The Department of Posts had appointed Ernst and Young as the consultant for the proposed 'Post Bank'. According to data shared with Parliament at the time there were over 26 crore operational small savings accounts with deposits totalling ₹1.9 lakh crore[2], but this has since grown to ₹6 lakh crore[1].
Although the DoP had obtained all necessary approvals from various stakeholders, including the Planning Commission and the Ministry of Finance, the indecisiveness on the part of the Congress-led United Progressive Alliance (UPA) government led the RBI to shelve it's decision to not grant a license as it did not had mandatory clearance from the government[3].
Financial Inclusion
The initiative will help promote Prime Minister Narendra Modi's Pradhan Mantri Jan Dhan Yojana project for comprehensive financial inclusion. There are approximately 154,000 post offices, 90% of which are located in villages. These would, by default, become a “bank”, thereby promoting financial inclusion on a scale not even the network of public sector banks could help. There is a post office for every 7176 people in the country and in rural areas, the ratio is 1:5682. The post office branches were used as a means to transfer the wages for NREGA beneficiaries - with around 2.2 crore people receiving payments through the post offices[4].
Structure
The PBI is likely to be established as a separate entity starting with branches in each district within the first 3 years with initial capital of ₹500 crore. Post office branches will be used for offering the full banking services, while PBI offices would be setup to handle back office operations such as processing of loan applications.
References
- ^ a b "Government mulls legislative route for setting up Postal Bank". Times of India. 11 January 2015. Retrieved 11 January 2015.
- ^ "Coming soon, Post Bank of India". The Hindu. 23 February 2013. Retrieved 11 January 2015.
- ^ "Post Bank of India: a missed opportunity for UPA-II". The Hindu. 4 April 2014. Retrieved 11 January 2015.
- ^ "Why RBI's decision on a Post Bank of India is a slap for Finance Ministry". First Post. 3 Apr 2014. Retrieved 11 January 2015.
External links
