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Union Cabinet clears proposal for the payment banks

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Published on 2 Jun 2016 12:09 PM GMT

Union Cabinet clears proposal for the payment banks
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New Delhi: The Union Cabinet, on Thursday cleared a proposal for post offices to open payment banks.which are scheduled to be operational in March next.

Initially, the target was to complete the preliminary works in three years but, on Thursday, at the cabinet meet, Prime Minister Narendra Modi asked the minister to finish the job by September next year.

As many as 650 payment bank branches are to be set up in first phase for which, the government has cleared a corpus of Rs 800--Rs. 400 crore as equity and a similar amount as grant.

Ravi Shankar Prasad, Communications Minister,, told media persons after the meeting, that "by March next year we will launch payments banks of the postal department. It's going to be a game changer.”

What else did Ravi Shankar Prasad say:

  • “There are 1.54 lakh post officers. our network will be the largest in the world, even bigger than theState Bank of India,”
  • Prasad also said that 60 international consortiums had shown keen interest and wanted to be partners in insurance and banking, among others.
  • India Post has the largest network of core banking solutions branches in the country.

The facilities to be provided:

  • India Post Payment Bank is likely to also facilitate central and state government payments as well as payment of municipal dues and fees of universities and educational institutions.
  • Apart from third party insurance and other services, the department has planned to set up 5,000 ATMs all over the country in order to popularise the banks.
  • The postal department will use 1.7 lakh postmen and other ground postal staff.
  • There is an ambitious plan to provide this ground staff 1.3 lakh handheld devices to turn them into mobile rural banks.
  • Apart from the handheld banking machine there is a proposal to provide study tablets and even smartphones to postmen.

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