Postal Depatment to launch payments bank by next year

The Department of Post (DoP) is likely to launch its payments bank by January next year and top management of the new-age venture would be in-place by July.

“We (India Post Payments Bank) hope to hit streets by year-end or January next year,” India Post Member for Banking and HRD, M S Ramanujan told reporters here.

The DoP, along with 10 other entities, received in-principle approval from RBI to launch payments banks in August last year. The approval is valid for a period of 18 months.

He said that India Posts will hire personnel from outside as well as deploy some of its existing workforce for the payments bank to be named as India Post Payments Bank (IPPB). “The top management of the IPPB should be in place by July,” Ramanujan said at an event to mark 15 years of



partnership with Western Union.

The DoP has received clearance for funds from the Public Investment Board (PIB) for the payments bank. It is in process to seek approval of the Cabinet Committee on Economic Affairs for setting up of the IPPB.

The IPPB is also likely to facilitate payments of central and state governments as well as municipal dues and fees of various universities and educational institutions.

Payments banks can’t offer loans but can raise deposits of up to Rs 1 lakh, and pay interest on these balances just like a savings bank account. They can offer services such as automatic payments of bills, and cashless purchases, chequeless transactions through a phone. They can issue debit cards and ATM cards which can be used at ATM networks of all banks.