After Airtel and Paytm, IndiaPost, which is one of the largest postal systems in India, has received final permission from the Reserve Bank of India to start its payment bank service in the country. With this, IndiaPost has become the third entity to get the permission.
Last year, RBI gave interim permission to eleven entities to set up payment bank services in India. However, out of those 11, only three have received final permission to operate the service so far. As per reports, IndiaPost got the permission last week.
Earlier, Bharti Airtel, one of the largest telecom operators in India, and Paytm, a fintech company providing payment solutions have started their payments bank service in the nation. While Airtel launched its service in December last year, Paytm started the service this month.
The government has also appointed AP Singh as interim Managing Director (MD) and Chief Executive Officer (CEO) of IndiaPost’s Payment Bank. He worked as an Indian Postal Service Officer. Earlier, he was a Joint Secretary in the department of disinvestment, the ministry of Finance and Deputy Director General in charge of financial inclusion and payments systems at Unique Identification Authority of India (UIDAI). He was also a part of the founding team that launched Aadhaar.
As per the initial roadmap for this service, each post office in the country will offer the payment bank services. Currently, the department of postal services has a network of around 1,55,000 post offices.
According to the reports, IndiaPost is planning to open 650 new branches for the payment bank, which will be co-located with the existing post offices. The new branches will be in located in postal district headquarters and all branches under that head post office will be enabled with the payment bank services.
Airtel Payments Bank is offering 7.25 percent interest on savings bank balances. Bharti and Kotak Mahindra, which holds a 20% stake in the payments bank, would be investing Rs 3,000 crore in the venture. As per the rules, payments banks can accept deposits of up to Rs 1 lakh per account from individuals and small businesses. Further, the central bank has set a condition that formal license has to be obtained before 31st March.
While Paytm and Airtel are focusing on technology-based differentiation, IndiaPost is banking on its massive reach, especially in the rural areas.