India Post has secured a licence from the Reserve Bank of India (RBI) to begin payments bank operations.
Payment banks are allowed to take deposits, offer internet banking, enable fund transfers, sell insurance and mutual funds, as well as issue ATM/debit cards. However, they will not be able to issue credit cards and lend to customers.
The Department of Posts was among the 11 entities that received RBI’s in-principle nod in August 2015 to offer payments bank services.
The others entities were: Airtel M Commerce Services, Aditya Birla Nuvo, Reliance Industries, Vodafone m-pesa, Tech Mahindra, Cholamandalam Distribution Services, Fino PayTech, National Securities Depository, Shri Vijay Shekhar Sharma and Shri Dilip Shantilal Shanghvi.
Later, Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services backed out of the initiative.
India Post is the third entity to secure a payment bank licence in the country. Last April, Bharti Airtel's subsidiary Airtel M Commerce Services obtained a payment bank licence from the RBI. Airtel Payments Bank launched operations in 29 states across India in January 2017. In the same month, mobile payments firm Paytm also received approval from RBI to launch a payments bank.