Department of Posts to seek Cabinet nod for Rs 1,900 crore funds

Department of Posts to seek Cabinet nod for Rs 1,900 crore funds

 

NEW DELHI: Department of Posts has started inter-ministerial consultations for seeking Cabinet approval on around Rs 1,900 crore fund requirement to start Post Banks in the country. 

"DoP will need around Rs 1,900 crore to start Post Banks in the country. This includes Rs 500 crore paid-up capital required under new banking licence guidelines and rest is for other capital adequacy norms that Post Banks will need to fulfil. Cabinet note has gone to various ministries to seek their views," a government official told PTI. 

The Department of Posts (DoP) has plans to apply for banking licence to offer full-fledged banking services along with postal services through post offices. 

The RBI has issued comprehensive guidelines for new bank licences. It has fixed July 1 as the last date for filing application by interested entities. 

The DoP has proposed to start 50 bank branches in the first year and scale it to a total of 150 branched in 5 years. 

There are around 90,000 bank branches in the country and provision of real-time banking services through postal network is estimated to triple the current banking network. 

Finance Minister P Chidambaram in this year's Budget speech said Post offices will become part of the core banking solution ( CBS) and offer real time banking services. He proposed provision of Rs 532 crore for the project in 2013-14. 

The Post Banks are proposed to be owned by DoP but with a completely independent board, governance structure and operations. It will have representation from Ministries of Finance and Communication & IT. 

"The branches in first phase will be opened in tier 1 to even very small cities with foucs on rural and retail micro, small and medium enterprises," the official said. 

India postal network has 1,54,822 post offices in the country. Of these, 1,39,086 are in rural areas and 15,736 are in urban regions.

Source : http://economictimes.indiatimes.com

 

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