The postal department has jumped into the banking fray after it moved application to the Reserve Bank for a licence to offer full-fledged banking services under the India Post. "We have approached the Reserve Bank and hopefully having met all the conditions of RBI, an in-principle approval might begiven. If it is given, I think, it will be a revolutionary step because it will bring banking, subject to the Cabinet approval, to the doorstep of the ordinary man in thiscountry," telecom and IT minister Kapil Sibal has said, adding postal savings constitute around Rs 6 trillion.
With this the list of applicants for bank licences has touched nearly 10 with IFCI, India Infoline, Bajaj Finserv also applying today. Already Religare Enterprises, Aditya Birla group, JM Financial, Anil Ambani’s Reliance Capital, Edelweiss, Srei Infra, Sriram Finance, TFCI, and others have applied, and the biggies like the Tatas and Reliance of Mukesh Ambani are expected to join the fray. The RBI is in the process of granting fresh banking licences and has set July 1 as the deadline for applying.
India Post has a network of 1,54,822 post offices. Of these, as many as 1,39,086 are in rural areas and the remaining 15,736 are in urban regions. Against this there are only around 90,000 bank branches and provision of real-time banking services through postal network is estimated to triple the current banking network. The department of post has plans to start 50 bank branches in the first year and scale it to a total of 150 branched in five years.
The minister said after RBI's in-principle approval the department will require the Cabinet approval to go ahead with its plan. "If RBI agrees that banking licence for DoP, then the proposition that must move forward because most of the common man does not have access to banking facilities. Post bank is ideal way to bring banking facility to the doorstep of the common man," Sibal said.
The postal department has started inter-ministerial consultations for seeking Cabinet approval on around Rs 1,900 crore fund requirement to start Post Banks. The total amount includes Rs 500 crore paid-up capital required under new banking licence guidelines. The Post Banks are proposed to be owned by DoP but with a completely independent board, governance structure and operations. It will have representation from ministries of finance and communication & IT.
