‘Payments bank, a historic opportunity for India Post’.

“Trust me ladies and gentlemen, India Post will soon be a force to reckon with. Until now we (India Post) were seen as a slumbering giant. Not anymore. We have woken up. This time we are not going to give it up, as payments bank presents a historic opportunity for India Post.”

So said MS Ramanujan, Member (Banking & HRD), Department of Posts, at the 3rd Financial Inclusion symposium organised by dun & bradstreet, exuding confidence about India Post regaining its spot under the sun.

“It’s very exciting for us as the payments industry is going to be like skating on thin ice. We don’t know who will fall by the wayside, when there will be a bloodbath, and what kind of pricing/revenue models will emerge,” he said, adding that this will be a game of high volumes and wafer-thin margins.

India Post is among the 11 successful applicants that recently got in-principle nod for a payments bank licence from the Reserve Bank of India.

The new entity will be registered as a company and will be called ‘India Post Payments Bank’. It will have an initial capital of ₹300 crore, much more than the minimum of ₹100 crore stipulated by the RBI.

“We will soon approach the Cabinet for approval,” Ramanujan told BusinessLine here.

Types of payments

The bank will undertake the following types of payments: P2P (people to people) — involving, say, remittances; C2G (citizen to government) — taxes, duties, levies, and so forth; C2B (customer to bank) — e-commerce-related payments, among others; and G2C (government to citizen) — such as direct benefits transfer payments.

One thing is certain — India Post will fully leverage the existing postal network (technology, personnel, etc) for its payments bank foray. However, the bank will have a separate logo.

As on date, nearly 7,000 full-services branches of the postal department are under core banking solution (CBS). By March-end 2016, all the 25,000 full-services branches of India Post will be under CBS, Ramanujan said.

(Courtesy:hindubusinessline. This article was published on October 15, 2015)