IndiaPost under Department of Posts (Union Ministry of Communications and Information Technology) received final payments bank licence from the Reserve Bank of India (RBI).
With this, India Post became the third entity after Bharti Airtel and Paytm to receive final payments bank licence to roll-out of banking operations commercially under the permit.
- As per the initial road map, each post office in the country will offer the post bank services. The department of post has an existing network of around 1,55,000 post offices currently.
- IndiaPost plans to open 650 new branches for the payment bank. These branches will be co-located with the existing post offices.
About Payments banks
- Payments banks are a new model of banks conceptualised by the Reserve Bank of India (RBI) to meet government’s financial inclusion target.
- It will be set up as a differentiated bank and will confine its activities to acceptance of demand deposits, remittance services, Internet banking and other specified services but cannot undertake lending services.
- Payments banks can accept deposits up to Rs. 1 lakh per account from individuals and small businesses. They can issue ATM/debit cards but not credit cards. They can also issue other prepaid payment instruments.
- They can distribute non-risk sharing simple financial products like mutual funds and insurance products. Non-resident Indians (NRIs) are not be allowed to open accounts in payment banks.
- This new model of banking allows mobile firms, supermarket chains and others to cater to banking requirements of individuals and small businesses.