Department of Posts cuts banking fund proposal to Rs 623 cr

Department of Posts cuts banking fund proposal to Rs 623 cr
The Department of Posts (DoP) has lowered its estimate of funds that it needs to start banking operations to about Rs 623 crore from its earlier projection of about Rs 1,900 crore, said the media report.

The DoP has applied for a banking licence. The Reserve Bank of India is expected to issue licences to shortlisted entities in January 2014. The proposal includes Rs 500 crore as paid-up capital under the RBI's new banking licence norms and the remaining amount is for infrastructure that is needed to comply with the new norms.

Moreover, the Government has sent the DoP's fund proposal to the Expenditure Finance Committee. Once cleared by EFC, the proposal will be placed before the Cabinet for final approval. Besides, the DoP plans to start 50 bank branches in the first year and scale it up to 150 branches in five years.

Finance Minister, P. Chidambaram, in this year's Budget proposals had said post offices would become part of the core banking solution (CBS) and offer real time banking services.

Dion Global Solutions Ltd.

Story first published: Monday, October 21, 2013, 9:10 [IST]
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