IndiaPost gets RBI's final nod for roll-out of payment bank
30 January 2017
IndiaPost has received final nod from the Reserve Bank of India (RBI) for a nationwide roll-out of its payment bank facility, becoming the third entity, after Airtel and Paytm, to offer payment banking services in the country under RBI's new policy.
IndiaPost, which is one of the largest postal systems in the world, is one of the 11 entities that RBI has issued primary licence to start payment banks in India. Although RBI granted interim permission to 11 entities to set up payment bank services in India, only three have so far received final permission to operate the service.
Bharti Airtel, one of the largest telecom operators in India, and Paytm, a fintech company providing payment solutions, have already started their payment bank operations. While Airtel launched its service in December last year, Paytm started the service this month.
Meanwhile, the government has appointed AP Singh as interim managing director and chief executive officer of IndiaPost's Payment Bank.
Singh, a former Indian Postal Service officer, was a joint secretary in the department of disinvestment, the ministry of finance and deputy director general in-charge of financial inclusion and payments systems at Unique Identification Authority of India (UIDAI). He was also a part of the founding team that launched Aadhaar.
IndiaPost currently has a network of around 1,55,000 post offices and, as per the initial roadmap, each post office in the country will offer the payment bank services.
IndiaPost is also reported to be planning to open 650 new branches for the payment bank, which will be co-located with the existing post offices. The new branches will be located in postal district headquarters and all branches under that head post office will be enabled with the payment bank services.
Airtel Payments Bank is offering 7.25 per cent interest on savings bank balances. Bharti and Kotak Mahindra, which holds a 20-per cent stake in the payments bank, are investing Rs3,000 crore in the venture.
As per the rules, payment banks can accept deposits of up to Rs1 lakh per account from individuals and small businesses. Further, RBI has set a condition that formal licence has to be obtained before 31 March.
While Paytm and Airtel are focusing on technology-based differentiation, IndiaPost is banking on its massive reach, especially in the rural areas.