The
Public Investment Board (PIB) is likely to consider on Janaury 15 a Rs
800-crore proposal from Postal Department for setting up payments bank.After the PIB's
approval, the proposal will be moved to Cabinet within a month. PIB
under the Finance Ministry vets investment proposals by state-run
entities.
As many as 40
international financial conglomerates, including World Bank and
Barclays, have shown interest to partner with Postal Department for the
payments bank. The pilot for payments bank is set to start from January 2017 while full-fledged operations may start by March 2017. "The PIB will
consider the DoP's Rs 800-crore proposal for setting up payments bank in
its meeting on January 15," an official source told.
As per RBI
guidelines, payments banks would offer a limited range of products such
as demand deposits and remittances. They will not be allowed to
undertake lending activities and will initially be restricted to holding
a maximum balance of Rs 1 lakh per individual customer. The Reserve
Bank of India has granted payments bank permit to the postal department,
which has 1.55 lakh branches across country and already provides
financial services.
The DoP has
shortlisted six consultants including McKinsey, KPMG, Ernst and Young
and PricewaterhouseCoopers to advise it on setting up of payment banks. They will be allowed to issue ATM or debit cards as also other prepaid payment instruments, but not credit cards.
