India Post is considering partnering state-run telecom major BSNL and using its mobile platform to offer payments bank services. To provide physical banking services under the payments bank, it will use its 150,000 post offices across the country.
“We will explore every platform for our payments bank venture. The discussion with BSNL is in the preliminary stages. We are looking at the feasibility of this tie-up and the prospective revenue streams,” a senior India Post official told Business Standard.
India Post has already moved a note with the Public Investment Board for an investment of Rs 300 crore on a payments bank. The board is likely to take up the matter this month, after which an approval from the Cabinet will be sought.
India Post is betting on banking to boost revenue. “We are targeting NRIs (non-resident Indians), the unorganised sector and micro, small and medium enterprises for remittances, payments and investments,” the official said.
In August this year, 11 firms, including Bharti Airtel, Reliance Industries and Vodafone, secured an in-principle approval for a payments bank licence from the Reserve Bank of India. Payments banks won’t be allowed to carry out lending activities; initially, these can hold a balance of up to Rs 1 lakh a customer. These banks will be allowed to issue ATM or debit cards but not credit cards.
The remittances market is estimated at Rs 2 lakh crore, half of which is in the informal sector and not reflected in official numbers (remittances through India Post, mobile wallets, etc) because of lack of clarity on the definition of migrants.
India Post is preparing notes to carve out a separate subsidiary for a payments bank, which will later become an umbrella firm for the bank, which it plans to start by March 2017, the official said.
Initially, the payments bank will have 650 main branches. Subsequently, 25,000 ‘spoke’ branches will be set up, while 130,000 post offices will act as business correspondents.
