The Public Investment Board (PIB) today discussed the Rs 800-crore proposal from the India Post for setting up a payments bank and the final approval on the same is expected in the next meeting.
“The proposal was discussed in the meeting today but no decision has been taken yet. Another meeting is likely in a week,” a official in the postal department told PTI.
After the board approval, the proposal will be moved to the Cabinet within a month. The PIB under the Finance Ministry vets investment proposals by state-run entities.
The pilot for payments bank is set to start from January 2017 and the full-fledged operations may start by March.
The department is likely to finalise the consultant for its payments bank by the end of this month. It had shortlisted six consultants but only three of them submitted their bids.
The consultant will advise the India Post on setting up of payments bank.
As many as 40 international financial conglomerates including World Bank and Barclays have shown interest to partner the postal department for setting up the bank.
The Reserve Bank has granted payments bank permit to the department, which is already into providing financial services and has 1.55 lakh branches across the country.
As per the RBI guidelines, a payments bank can offer limited services 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 Rs 1 lakh per individual customer.
They will be allowed to issue ATM or debit cards as other prepaid payment instruments but not credit cards.