Lok Sabha Question No. 56 (STARRED), answered on 2016-04-27
Subject: Payments Banks by India Post
Ministry: COMMUNICATIONS AND INFORMATION TECHNOLOGY
Asked by: ELUMALAI VELLAIGOUNDER, RAJAN BABURAO  VICHARE

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY DEPARTMENT OF POSTS

## LOK SABHA STARRED QUESTION NO.56 TO BE ANSWERED ON 27 th  APRIL, 2016

## PAYMENTS BANKS BY INDIA POST

- *56. SHRI V. ELUMALAI:

## SHRI RAJAN VICHARE:

Will the Minister of COMMUNICATIONS AND INFORMATION TECHNOLOGY be pleased to state:

- (a) whether India Post proposes to set up payments banks;
- (b) if  so,  the  details  thereof,  State-wise  along  with  the  services  likely  to  be provided by such banks;
- (c) whether  some  financial  giants  have  shown  interest  to  partner  with  the payments banks;
- (d) if so, the details thereof; and
- (e) whether the International Finance Corporation, a member of the World Bank Group, has also shown interest in picking up a stake in the  business and if so, the details thereof?

## ANSWER

## THE MINISTER OF COMMUNICATIONS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a) to (e) A Statement is laid on the Table of the House.

## STATEMENT TO BE LAID ON THE TABLE OF THE LOK SABHA IN RESPECT OF PARTS (a)  TO  (e)  OF  LOK    SABHA  STARRED  QUESTION  NO.  56    FOR  27 TH APRIL, 2016 REGARDING 'PAYMENTS BANKS BY INDIA POST'.

- (a) Yes Madam.

(b) During  November  2014,  RBI  had  issued  guidelines  for  setting  up  of  Payments Banks and Department of Posts applied for license to  RBI in January 2015. RBI has granted 'In-Principle approval to Department of Posts for setting up a Payments Bank on 7 th September, 2015 with a stipulation to complete all formalities for setting up the Bank within 18 months  i.e. by 6 th March  2017. The Public Investment Board has recommended  that the Payments Bank  may be set up as a Public Limited Company under the Department of Posts with 100% Government of India Equity. With a project cost of  Rs 800 crores (Rs.400 crore equity and 400 crore grant) and  the draft  cabinet note  has been forwarded to Cabinet  Secretariat  seeking the  approval for the project.

The present proposal is that the IPPB may set up one Headquarter and upto 650 branches  co-located  in  District  HQ  post  offices.      The  project  may  be  rolled  out  in  a phased manner and the bank may complete its nation-wide roll-out in five years. All  the post offices in a district may be linked to the respective IPPB branch and may  become the  access  point  for  the  services  of  Payments  Bank  and  will  coordinate  with  the Payments Bank branches to which they are mapped

The  services  available  through  the  Payments  Banks  will  be  basic  banking services such as acceptance of demand deposits such as current and savings accounts up  to  a  balance  of  Rs  1  Lakh,  various  kinds  of  payments;  including  social  security payments like DBT payments, person to person remittances (both domestic and crossborder).  Apart  from  these,  financial  products  like  insurance,  mutual  funds,  pensions, credit  etc  may be distributed through third party tie ups with banks and other financial service providers especially in rural areas and among the under banked segments of the society.

(c) Yes Madam, enthused by the rapid modernization of the Department of Posts in the past few years, more than 60 large companies have approached the Department of Posts for collaboration with the prospective India Post Payments Bank. More than 40 of these are domestic and international financial giants in the field of banking, insurance, international money transfer, mutual funds etc. While the Department is in various stages of  discussions  with  them,  decision  on  formal  partnerships  will  be  taken  after  carefully evaluating the entire value proposition that they propose for the common man.

(d)      A  list  of  financial  service  providers  interested  in  collaborating  with  India  Post Payments Bank is attached at Annexure A.

(e) No  Madam.  Although  some  preliminary  discussions had  taken place with International Finance Corporation, no formal proposal to this effect has been received.

Contd…3/-

## Annexure-A

| List of Financial Service Providers interested in collaborating with India Post Payments Bank   | List of Financial Service Providers interested in collaborating with India Post Payments Bank   |
|-------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|
| Sl No.                                                                                          | Financial Services Institutions                                                                 |
| 1                                                                                               | Allahabad Bank                                                                                  |
| 2                                                                                               | Ambay Forex                                                                                     |
| 3                                                                                               | Axis Bank                                                                                       |
| 4                                                                                               | Bajaj Allianz Life                                                                              |
| 5                                                                                               | Bank of Baroda                                                                                  |
| 6                                                                                               | Barclays Bank                                                                                   |
| 7                                                                                               | Centre For Digital Financial Inclusion                                                          |
| 8                                                                                               | Citibank                                                                                        |
| 9                                                                                               | CMS Infosystem (Cash Management)                                                                |
| 10                                                                                              | Dena Bank                                                                                       |
| 11                                                                                              | Deutshe Bank                                                                                    |
| 12                                                                                              | FIA Global (Financial Inclusion)                                                                |
| 13                                                                                              | HDFC Life Insurance                                                                             |
| 14                                                                                              | Hitachi Payment Services                                                                        |
| 15                                                                                              | HSBC Bank                                                                                       |
| 16                                                                                              | IBRT - Institution for Bank Recruitment and Training                                            |
| 17                                                                                              | ICICI Lombard                                                                                   |
| 18                                                                                              | ICICI Prudential                                                                                |
| 19                                                                                              | IDBI Bank                                                                                       |
| 20                                                                                              | IDFC Bank                                                                                       |
| 21                                                                                              | IDRBT - Institute for Development & Research in Banking Technology (estb. By RBI)               |
| 22                                                                                              | IFC- International Finance Corporation (World Bank group)                                       |
| 23                                                                                              | India First Life Insurance                                                                      |
| 24                                                                                              | Indian Overseas Bank                                                                            |
| 25                                                                                              | ITI Limited                                                                                     |
| 26                                                                                              | Kotak Mahindra Bank                                                                             |
| 27                                                                                              | Max Life Insurance                                                                              |
| 28                                                                                              | MICRO SAVE                                                                                      |
| 29                                                                                              | Muthoot Fin Corp                                                                                |
| 30                                                                                              | NABARD                                                                                          |
| 31                                                                                              | NIBM - National Institute of Bank Management                                                    |
| 32                                                                                              | Nomura Research Institute                                                                       |
| 33                                                                                              | NPCI                                                                                            |
| 34                                                                                              | Paytm                                                                                           |
| 35                                                                                              | Pension Fund Regulatory and Development Authority                                               |

|   36 | Punjab National Bank                   |
|------|----------------------------------------|
|   37 | Punjab National Bank Metlife Insurance |
|   38 | Reliance Capital Limited               |
|   39 | Religare Health Insurance Company      |
|   40 | Royal Sundaram (General Insurance)     |
|   41 | SBI Life                               |
|   42 | State Bank of India                    |
|   43 | UAE Exchange                           |
|   44 | Union Bank of India                    |
|   45 | UTI Mutual Fund                        |
|   46 | Western Union                          |
|   47 | Worldline e-Payment Services           |
|   48 | YES Bank                               |

## ****************