India Post to join banking business in India

                                               Do you want to open a new bank account? How about opening it at ‘Post Bank of India’? Yup you heard me right; Indian Postal Department, to be precise India Post is planning to join the Banking business in India. Few days back the Reserve Bank of India (RBI) has said that it is deciding to grant new bank licenses to the reputed entities, which have credible track-record.

                                              Some relevant sources said that the Postal Department has eventually appointed Ernst and Young as consultant partners for proposed 'Post Bank'. The Department of Posts has a very strong hold in the rural areas since its inception, which would be a beneficiary factor, if it’ll actually apply for the bank license to the RBI.

                                               A source at the Ministry of Communications and Information Technology told PTI (Press Trust of India), "Ernst and Young is expected to submit detailed project report by April 2013, after which all necessary measures will taken up to apply for banking license,"

                                              The source also added a key factor that the Department of Posts may require cabinet approval for setting up ‘Post Bank of India’. The Indian Postal Department is a very big and well-reputed entity, and if it joins the banking business in India, then it’ll be a revolutionary step for sure. Both the country and the country men will be benefited by it.

                                             Three days ago on 22^nd February RBI issued the guidelines for new banking licenses, which will be required to follow if any of the big entities want to set up a bank by acquiring the license. There a number of terms in those guidelines, among other terms, all the new banks should open at least 25% of all branches in unbanked rural centres. This is the factor, which would benefit India Post in a big way for obvious reasons.

                                              Currently India Post has 1.55 lakh post offices, and it is expected that around 24k district offices may be able to get ready to offer necessary banking services in next two years or so. It has to be mentioned that all the Post Offices are already being enabled by core banking solution's (CBS) connecting all the nationwide branches. This CBS system was enabled by the government of India as part of a transformative IT Project.

                                             "Post Bank shall not only take care of the banking needs of the rural poor but shall also converge with micro-insurance and micro-remittance services of the Department of Posts," the source added. Eventually as per now India has around 90,000 bank branches, and DoPs is working in process of setting up around 1000 ATMs across the country.

                                              The head offices that have been chosen by DoP for setting up ATMs cover all the states in its list. As per report around 100 ATMs would be set up in Andhra Pradesh only. That’s not all as many as 92 ATMs in Tamil Nadu, 73 ATMs in Uttar Pradesh, 61 ATMs in Maharashtra, 60 ATMs in Karnataka, 51 ATMs each in Kerala and Rajasthan. So it almost covers all the important states in the list.

                                              As per the data that was shared with Parliament on March 31, 2012, India Post has a deposits worth Rs 1.9 lakh crore, which is huge, and there were over 26 crore operational small savings accounts in the various post offices across the country.

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