Union Government gave nod to proposal to set up India Post Payments Bank

Union Government has decided to approve the proposal to set up the Indian Post Payments Bank with capital of Rs. 800 Crore and to set up 650 branches by September 2017 as a Public Limited Company under the Department of Posts, with 100% Government of India (GOI) equity

Focus: To increase financial inclusion in the country

Initial Setup: 22,137 Post Offices linked with core banking facility

Key Aspects:

• In every district, Post offices will be linked to core branch of Postal bank
• The bank will be operated by a board which has five independent directors
• Union is in the phase to appoint the Chief Executive Officer and Bank Board directors
• The Staff of the postal bank will be from different postal department and staff is expected to be around 2000 members
• The Department of Posts is planned to acquire knowledge from State run banks to run the India Post Payments Banks
• For the short tenure, S K Sinha, Secretary of Posts requested Chairman and Managing directors of the Punjab National Bank, Bank of Baroda, Bank of India, Canara Bank and Union Bank to lead the India Post Payments Bank on a one-year deputation basis
• The branches will be spread across metros, tourist places, state capitals and in the first phase, 10% of the branches will be set up in the northeast region of the country
• Other services such as mobiles, ATMs, PoS/ m-PoS devices and simple digital payments

Future Proposal:

• Providing basic banking, payments and remittance services
• Facilitate financial services like insurance, mutual funds and pensions
• Access to credit in tie-up with third party financial providers with special focus on rural areas and the unbanked and under-banked segments