In A Recent Meeting Chaired By PM, The Department Of Posts Said It Is Ready To Move Into Banking Space By Becoming A Universal Bank

New Delhi : The government is looking at taking the legislative route, by next month, to finalise the setting up of Postal Bank of India and will soon approach RBI to consider the postal department’s application for banking licence. In a recent meeting chaired by Prime Minister Narendra Modi, the Department of Posts (DoP) said that it is ready to move into the banking space by becoming a universal bank, sources said.

According to a presentation given to the Prime Minister, DoP, in consultation with the government, may approach RBI this month to consider its original application for a universal bank, the source told PTI.

“Simultaneously, modalities for the alternative of taking the legislative route to set up Postal Bank of India (PBI) would be worked out in February,” the source said. The meeting, which was also attended by Communications and IT Minister Ravi Shankar Prasad, discussed the proposals of the ‘Task Force on Leveraging the Post Office Network’ and the way forward to implement the recommendations.

The Reserve Bank of India (RBI) in August last year said that the Union government has to take a final call on application for banking licence by DoP.

The sources said to begin with, DoP proposes to have Post Office Savings Bank (POSB) to run parallel to the PBI, which can eventually become part of the PBI as suggested by the Task Force.

The source said post offices as front of PBI shall offer full banking services to the customers whereas PBI branches shall only handle the back office operations such as processing of loan applications, credit worthiness and risk assessment, investment operations etc.

“PBI will also offer the facility of opening institutional accounts, like for panchayats, micro credit agencies, along with new schemes and market linked rates,” the source added.

In December last year, a Task Force set up by the Prime Minister noted that with its Rs 6 lakh crore in deposits, India Post is second only to the country’s largest bank SBI.

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal