The union cabinet of India has given the go-ahead to the setting up of India Post’s payments bank venture.
India Post Payments Bank will be set up as a public limited company under the department of posts, entailing a total investment of $8bn.
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Fifty percent ($4bn) of the investment amount would be provided by the government as equity, while the remaining $4bn would be given as grant over the next five years.
The bank will offer services across the country from 650 branches, which will be linked to the country’s rural post offices, as well as alternative channels such as mobiles, ATMs, PoS/ m-PoS devices and simple digital payments.
The new payments bank is expected to be operational by 2017.
Department of Posts received ‘in-principle’ approval from the Reserve Bank of India (RBI) to set up payment bank in 2015.
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By GlobalDataPayment banks will be able to take deposits, offer internet banking, support money transfers and sell insurance and mutual funds. The banks can issue ATM/debit cards, but will not be able to issue credit cards or lend to their customers.
