RBI may soon allow
interoperability of India Post's payment bank ATMs
India Post, the world's
largest mail delivery network, is carving out a separate vertical to manage
banking services, a move that will help it win RBI nod for interoperability of
its ATMs with those of PSU banks.
India Posts, which had
last year won a licence to operate a payment bank, has not been able to move
much on starting operations.
"We wanted
interoperability of the ATMs of Post Offices with other banks. RBI said we can
allow it only if Post offices create a separate bank vertical because RBI has
jurisdiction over only banks. The Postal department has taken a positive
approach and created a separate vertical," a finance ministry official
said.
The vertical will be
based out of Bengaluru.
Interoperability will
allow individuals to transfer money from their Post Office account to their
accounts in any bank. Besides, the Post Office ATMs can be used for withdrawal
of money from the bank accounts.
The official, further,
said the vertical will be created to operationalise the Post Bank licence and
ultimately it would get merged suitably with the Post Bank.
DoP has 28,000
departmental post offices and 1.50 lakh rural post offices across the country.
The Postal Department
is proactively setting up ATMs and micro ATMs in its rural post offices so as
to tap its wide network for financial inclusion.
"RBI said this
separate vertical of the Postal department is open for banking regulation. The
RBI is favourably considering the option to provide interoperability," the
official said.
"This will help in
moving towards a less cash economy. Post Office has its branches even in the
remotest areas where banking mitras or business correspondents cannot reach.
Interoperability will allow leveraging the reach of Postal department,"
the official added.
With the formal
structure of Post Bank likely to take around a year and half, the government
wants to kick start its operations in parts by first putting into use the ATMs
of Post Offices.
India Post plans to
roll out 10,000 ATMs and 20,000 micro ATMs across the country by the end of
this year.
India Post payments
bank will primarily target unbanked and under-banked customers in rural,
semi-rural and remote areas, with a focus on providing simple deposit products
and money remittance services.
The Union Cabinet last
month cleared a proposal to set up India Post payments bank with a corpus of Rs
800 crore.
Payments banks can
accept deposits (initially up to Rs 1 lakh per individual), offer Internet
banking, facilitate money transfers and sell insurance and mutual funds by
piggy-backing on existing retail or other networks. Besides, they can issue
ATM/debit cards, but not credit cards.
The Postal payments
bank, which will be run by Chief Executive Officer, will be professionally
managed and there will be a officials from Department of Posts, Department of
Expenditure and Department of Economic Services etc on its board.
Source : The Economic
Times