'RBI may give payment bank licence to Post Dept in Aug'

The Government is expecting payment licence to the proposed Post Bank of India by August from the banking regulator, Reserve Bank of India (RBI).“We expect RBI to give payment bank licence to post (department) in August,” Minister of Communications & IT Ravi Shankar Prasad said.The proposed Post Bank of India will enable the network of 1,54,000 post offices (including 1,30,000 rural post offices) to offer banking services to the masses in the country.

In last one year, the Department of Post (DoP) has networked 27,215 post offices into one national unit through computers. The DoP, which has applied for a payment bank licence, has a hybrid model in mind to operate Post Bank of India.As per the central bank guidelines, payment banks would offer a limited range of products such as demand deposits and remittances. They will not be allowed to undertake lending activities and will initially be restricted to holding a maximum balance of `1 lakh per individual customer.They will be allowed to issue ATM or debit cards as also other prepaid payment instruments, but not credit cards.