The Union Cabinet on Wednesday approved a proposal by the department of posts’ for foray into the banking sector by launching the India Post Payments Bank, a development that would help the central government in its initiative of 100% financial inclusion.
“The India Post Payments Bank will be a game changer for financial inclusion of the poorest of poor people,” said Ravi Shankar Prasad, Union minister for communications and information technology. “It will be the largest banking network in the world.”
As per the proposal approved by the Cabinet, the India Post Payments Bank will be set-up as a public limited company under the department of posts, with a total investment of Rs 800 crore, according to a government statement. Of this Rs 400 crore would be infused by the government as equity and the remainder would be given as grant for the next five years, it showed. The secretary of the department will be a part-time non-executive chairman of the bank’s board.