India Post has done well to cash in on the e-commerce boom—in just the first nine months of the year, it has earned nearly Rs 1,000 crore from delivering parcels. Given its extensive network, especially in tier II cities and rural areas, this is only going to grow faster. It is this network that also makes its forthcoming avatar as a payments bank look promising. Given it will handle postal savings of over Rs 47,000 crore in 20 lakh accounts—with 1.55 lakh branches—India Post Bank’s operations would receive a major fillip once it becomes completely core banking-enabled; communications and IT minister Ravi Shankar Prasad has said that India Post is targeting a March 2017 start for its payments bank operations, though the portion that will be core-banking-enabled by then is not clear.
Once the government’s direct benefits transfer (DBT) scheme picks up, India Post’s bank should be in a good position to make the most of this given the proximity of its branches to most rural households. With over 35 schemes, including subsidy for LPG, coming under the DBT fold, almost Rs 40,000 crore had been paid to beneficiaries by December 27, 2015; this will grow manifold once food and fertilizer subsidies are added to this. It would, however, be unfair if the DBT market is reserved for the postal bank. Other banks, including those backed by mobile phone firms, should be allowed an equal shot at this business.