World Bank might support India Post's payments bank

World Bank might support India Post's payments bank

The World Bank has shown interest to financially support the proposed India Post Payment Bank, having approached the department of posts (DoP), say sources.

The Reserve Bank of India  (RBI) had in October approved the proposals of 11 applicants, including the DoP, to start a payments bank.

These entities may offer most of the services offered by commercial banks, except for loans and credit card products.

“The World Bank wants to part-finance the project. We are having discussions at the inter-departmental and ministry level and would come out with a final decision early next year,” said a senior official in the department to Business Standard.  

In October, the Bank had said the decision on the 11 new payments banks should expand penetration of banking in the rural areas, helping transform the rural remittances market.

The Bank is still seeking some clarity on the DoP issue, said its spokesperson. “There has been only one exploratory meeting with the postal service,” the person added.

According to officials in the ministry of communications, which oversees DoP, the latter is weighing options on the partners to choose for the project. It is also in the process of finalising a consultant for the project, the tender for which would be opened on January 6. And, waiting for Public Investment Board clearance from the finance ministry, expected next month.

“It’s only after the consultants do their research that we'd decide whom we want to partner with,” said a senior DoP official.

The department has 155,000 branches in the country. In the first phase, it plans to start payment banking services across 500 post offices.

The ministry has said as many as 17 banks and financial institutions — including Deutsche Bank, IDBI, Barclays, YES Bank, ICICI Prudential, and HDFC — are seeking an alliance with the proposed India Post Payment Bank.

“They want to use the postal network by entering into tie-ups for delivery of services such as loans, monthly instalments, collections, insurance, mutual funds and premiums, among other things,” added the official.

Recently, Hitachi had also said it was keen to partner DoP for payments bank solutions. In a meeting with communications minister Ravi Shankar Prasad this month, Yutaka Saito, president of Hitachi, had discussed the possibility.

PUBLIC AND PRIVATE FIRMS

Seeking to partner India Post Payment Bank

• SBI
• IDBI
• UCO
• PNB
• Yes Bank
• Deutche Bank
• HDFC
• Axis
• Barclays
• HDFC Life
• ICICI Prudential
• Bajaj Alliance

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