The Department of Post today submitted application before the Reserve Bank for a licence to offer full-fledged banking services.
“We have approached RBI today and hopefully having met all the conditions of RBI, an in-principle approval might be given. If it is given, I think, it will be a revolutionary step because it will bring banking, subject to Cabinet approval, to the doorstep of the ordinary man in this country,” Telecom and IT Minister Kapil Sibal told PTI.
The RBI is in the process of granting fresh banking licences and has set July 1 as the deadline for applying.
The India postal network has 1,54,822 post offices in the country. Of these, 1,39,086 are in rural areas and 15,736 are in urban regions.
There are around 90,000 bank branches in the country and provision of real-time banking services through postal network is estimated to triple the current banking network.
The The Department of Post (DoP) has plans to start 50 bank branches in the first year and scale it to a total of 150 branched in 5 years.
The Minister said after RBI’s in-principle approval the Department of Posts will require the Cabinet approval to go ahead with its plan.
“If RBI agrees that this (banking licence for DoP) is the proposition that must move forward because most of the Aam Aadmi (common man) does not have access to banking facilities. Post bank is ideal way to bring banking facility to the doorstep of aam aadmi,” Sibal said.
Department of Posts has started inter-ministerial consultations for seeking Cabinet approval on around Rs 1,900 crore fund requirement to start Post Banks. The total amount includes Rs 500 crore paid-up capital required under new banking licence guidelines.
The Post Banks are proposed to be owned by DoP but with a completely independent board, governance structure and operations. It will have representation from Ministries of Finance and Communication & IT.