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India Post plans to enter banking businsess

India Post plans to enter banking businsess
The Indian postal department plans to enter the banking business with RBI deciding to grant new bank licences to entities with credible track-record.

Sources said the Department of Posts, which a strong foot print in rural areas, has appointed Ernst and Young as consultant for proposed 'Post Bank'.

"Ernst and Young is expected to submit detailed project report by April 2013, after which all necessary measures will taken up to apply for banking licence," a source at Ministry of Communications and Information Technology said.

Sources added that Department of Post (DoP) may need Cabinet approval for setting Post Bank of India.

The Reserve Bank of India on Friday issued the much-awaited guidelines for new banking licences. Among other terms, new banks should open at least 25 per cent of branches in unbanked rural centres.

Of the 1.55 lakh post offices, around 24,000 district offices may be ready to offer banking services in next two years. Post offices are being enabled by core banking solution's connecting nationwide branches as part of a transformative IT project.

DoP is in process of setting up 1,000 ATMs.

The country has around 90,000 bank branches at present.

"Post Bank shall not only take care of the banking needs of the rural poor but shall also converge with micro-insurance and micro-remittance services of the Department of Posts," the source said.

The head offices chosen for setting up ATMs covers all the states, with Andhra Pradesh leading the tally at 100 ATMs, followed by Tamil Nadu (92) and Uttar Pradesh (73).

As many as 61 ATMs would be set up in Maharashtra, 60 ATMs in Karnataka, 51 ATMs each in Kerala and Rajasthan.

As per data shared with Parliament, there were over 26 crore operational small savings accounts in the post offices as on March 31, 2012 having deposits worth Rs 1.9 lakh crore.


Read more about: banks india post
Story first published: Saturday, February 23, 2013, 10:59 [IST]
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