New Delhi :  Armed with a payments bank licence now, the postal department should gear up to become a vehicle of financial inclusion in the country, Communications and IT Minister Ravi Shankar Prasad said. The minister said that the postal department should prepare itself properly and effectively for this opportunity.

The payments bank licence will enable the Department of Post (DoP) to offer banking services to the masses through its vast network of 1,54,000 post offices, of which 1,30,000 are in rural areas.

“This is a very proud moment for the postal department. I have been trying since I became minister to energise and make the vast network of the department for financial digital inclusion and e-commerce activity,” Prasad told PTI. “I am very happy to learn that the postal department has been given a payment banking permission by the RBI. I thank the RBI, governor and his team,” Prasad said.

Ten others who got the approval are Reliance Industries Ltd., Aditya Birla Nuvo Ltd., Cholamandalam Distribution Services Ltd., Airtel M Commerce Services Limited, Fino PayTech Limited, National Securities Depository Limited, Dilip Shantilal Shanghvi, Vijay Shekhar Sharma, Tech Mahindra Limited and Vodafone m-pesa Limited.

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.

Telecom major Airtel in a statement said Airtel M Commerce Services will play a pivotal role in bringing millions of unbanked Indians into the folds of banking.

Tech Mahindra’s MD & CEO C P Gurnani said as of now, his company and the group’s financial services arm Mahindra Finance will have an equal partnership for the payments bank, but it is also open to inducting partners with expertise in core banking and outreach to the masses.

When asked about reports of a tie-up with World Bank group entity IFC, he parried the question. Fino PayTech’s chief executive Rishi Gupta said the company will now be hitting the street to raise capital for the payments bank, and exuded confidence that it will not be difficult as it is already involved in the payments space. He said his company will be investing Rs 300 crore for the bank and is confident of breaking-even in three years.

Vodafone said the company has partnered with several government bodies to run pilots for enabling direct transfer of wages/subsidies and the payment bank licence will enable it to build on this further.

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