Post Bank Receives 1, 300 Cr from Government

Bangalore: The Department of Post submitted application before the Reserve Bank for a license to offer full-fledged banking services. Following that, the department of expenditure has decide to allocate 1, 300 Crore to India Post to commence its banking operations, reports Sidhartha & Surojit Gupta of Times of India.

The proposal is backed by Finance minister P. Chidambaram and the expenditure finance commission where as the department of financial services (DFS), branch of the Finance Ministry that deals with state-run banks and their policies chose to stay away from the issue.

However, it will be a big challenge for the post bank to articulate a concrete banking infrastructure. Even the largest financial lender in the country, State Bank of India has around 15,000 branches, while there are over 1.5 lakh post offices across the country.

Though Post Bank is not planning to start a bank branch in each post office, but it is intending to use postmen to meet the financial inclusion goal. The plan is to start branches only in few selected Head Post offices in Tier-1-4 centres and select Sub-Post Offices in Tier-5-6 centres.

In order to meet the RBI norms, the postal department proposed to build a separate entity, Post Bank of India, which will be run by independent directors and have a separate board.

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