Around 650 branches of payment banks will be made operational in various district headquarters initially and will be linked to the rural post offices.
The Union cabinet on Wednesday passed the proposal for Indian Post Payment Bank (IPPB) which will see your nearest post office functioning as a bank by March 2017 in about 50 districts and by March 2019 in the entire country.
Currently, India has about 154,000 post offices, out of which 139,000 are in rural India.
Around 650 branches of payment banks will be made operational in the district headquarters initially and will be linked to the rural post offices.
“By March next year, we will launch payments bank of the postal department. It’s going to be a game changer. There are 1.54 lakh post offices. And our network will be the largest in the world. Even bigger than State Bank of India,” said Communications and IT minister Ravi Shankar Prasad while addressing reporters.
The amount invested for this proposal is about Rs. 800 crore, out of which Rs. 400 crore is equity and the remaining amount is by government grants.
In addition, 1.7 lakh postmen in rural India will be provided with smart phones and tablets so that people can easily access their bank accounts. The department plans to set up about 5000 ATMs all over the country along with internet and mobile banking.
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The postal payment banks will also facilitate payments of state and central governments and also municipal dues and fees of educational institutions. Also, it will provide easy access to loans, collection of EMI and insurance.
Ravi Shankar Prasad also said that several national and international banks have shown interest in collaborating with India Post so that they can sell their financial products such as insurance.
“Fifty top names are here, including Barclays. Talks are on and a huge matrix will be created,” he said.
Earlier, Prime Minister Narendra Modi had asked Prasad to complete this plan in three years but now this will be done within a year.