New Delhi : The Union Cabinet on Wednesday approved the constitution of the first payment bank under the Department of Posts. The RBI has already given its in-principle approval earlier.
The bank will accept small savings accounts and render remittances and mobile and net banking services. These will be targeted at the migrant labour workforce, low-income households, small businesses and other unorganised sector entities.
“The payments bank will be a game-changer in rural and semi-urban areas. It will help in our larger goal of financial inclusion,” Communications Minister Ravi Shankar Prasad said after the cabinet meeting. All post offices, including the rural ones, will be the access points for the payments bank. These post offices will be equipped with Micro-ATMs for facilitating both cash and digital transactions. More than 50 national and international banks, insurance companies and money transfer organisations are keen to tie up with India Post Payments Bank.
The payments bank will have 5,000 ATMs and involve an investment of Rs 800 crore, half of it in the form of equity and the rest will be in the form of a grant. It is expected to be operational by September next year.
