Postal dept has also floated tender for appointing consultants for the new venture; likely to finalise one by next month.
As many as 25 commercial banks and institutions including Deutsche
Bank, State Bank of India, Punjab National Bank, Axis Bank, Yes Bank and
IDBI have evinced interest in partnership with India Post for their
payments bank venture.
The postal department has also floated tender for appointing
consultants for the new venture and likely to finalise the consultant by
next month, a senior official from the department of posts told
Business Standard.
"We are in the process of appointing a consultant. Subsequently, we
will take a decision on the various proposals by banks and institutions
which might take few months. We are evaluating the proposals," the
official said.
In August this year, RBI approved Payments Bank plans of 11 firms
including Paytm, Reliance Industries, Bharti Airtel, Departments of
Posts (DoP), Vodafone and others.
The official said such partnerships could be beneficial for end users
and could enable offerings of mutual funds, insurances and other
related products to the customers.
As per RBI guidelines, the first branch of payments bank has to be
set up within 18 months. Payments bank will be able to offer products
such as demand deposits and remittances. They will not be allowed to
undertake lending activities and will initially be restricted to hold a
maximum balance of Rs 1 lakh per customer. However, they will be allowed
to issue ATM or debit cards as other prepaid payment instruments, but
not credit cards.
Money remittance is a big segment and 55-60 per cent of these happen
in the unorganised sector while the total market is estimated to be Rs 2
lakh-crore, half of which is in the informal sector.
DoP is in the process of preparing a note for approval by the Public
Investment Board (PIB) for an investment of around Rs 300-400 crore for
Payments Bank.
After PIB, an approval will be sought from the Cabinet. A
wholly-owned subsidiary will be carved out under the DoP for payments
bank, which will later become an umbrella firm for a full Bank and
professionals will be roped from the private sector to manage the new
firm
Under the payments bank, the initial plan is to have 650 main
branches where the department has head or bigger post offices.
Subsequently, 25,000 'spoke' branches will be set up while the other
130,000 POs will act as business correspondents. The new unit will use
the existing infrastructure of the postal department and will pay user
charges to the department.
According to an earlier detailed project report by Ernst & Young
for DoP, the payments bank will be able to break-even in five years,
once operations start. And, DoP will earn revenue of Rs 250 crore in the
first year from the new banking entity, expected to go up to Rs 600-700
crore annually in the five years.
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