Over 2 dozen companies want to partner India Post Payments Bank

More than two dozen companies, including banks and financial institutions, have approached the Department of Posts for collaboration with India Post Payments Bank. Department of Posts is in various stages of collaboration with these companies for a formal partnership, minister of communications Manoj Sinha said.

Replying to a question in the Rajya Sabha, Sinha said that while the department is in various stages of discussions with them, decision on formal partnerships will be taken after carefully evaluating the entire value proposition that they propose for the common man.

The Postal Bank, with a branch network of about 1.5 lakh post offices - about 1.3 lakh in villages and about 25,000 in cities and towns - has a much bigger network than even the State Bank group and its asociate banks, numbering about 25,000.

The postal department already has years of experience in maintaining savings accounts. Total outstanding balance under all National Savings Schemes and Savings Certificates in post offices is over Rs6,39,254 crore as on 31 March 2016.

And, with ATMs becoming interoperable, India Post customers with debit cards can transact on other bank's ATMs and while customers of  other bank can transact on Postal Bank ATMs, without any transaction charges.

All these are a big draw for private operators wanting to avoid big spends on infrastructure.

The India Post Payments Bank launched its two branches in Raipur (Chhattisgarh) and Ranchi (Jharkhand) on 30 January 2017 with basic products and banking services in partnership with Punjab National Bank.

Sinha also said that the payments banks are different from regular banks and are bound by RBI guidelines for licensing of payments banks:

Payment banks are not allowed to undertake lending activities directly. They can accept demand deposits only ie savings and current accounts and will initially be restricted to holding a maximum balance of Rs100,000 per individual customer.

Payment banks cannot accept non-resident Indian (NRI) deposits.

Payment banks cannot set up subsidiaries to undertake non-banking financial services activities.

The minister provided a list of companies interested in partnering with India Post Payments Bank, which include:

  1. YES Bank,
  2. Union Bank
  3. Punjab National Bank
  4. IDBI Bank
  5. SBI
  6. Axis Bank
  7. Bank of Baroda
  8. IDFC Bank
  9. Deutshe Bank
  10. Barclays Bank
  11. Citibank
  12. NABARD
  13. HSBC
  14. Micro Save
  15. Allahabad Bank
  16. Indian Overseas Bank
  17. Dena Bank
  18. FIA (Financial Inclusion)
  19. Kotak Mahindra Bank
  20. United Bank of India
  21. HDFC Life
  22. Royal Sundaram
  23. PNB Metlife
  24. ICICI Lombard
  25. ICICI Prudential and Bajaj Allianz Life.