RBI approves Department of Posts “in principle” to set up payments bank
The Reserve Bank of India (RBI) has granted its approval “in-principle” for the Department of Posts to set up a payments banks. The Department of Posts (which oversees India Post) was one of 11 applicants to whom the RBI’s Committee of the Central Board (CCB) granted this approval at meeting on Wednesday (19 August).
In a statement issued on Wednesday, the RBI said: “In arriving at the final list, the CCB noted that it would be difficult at this stage to forecast the most successful likely model in the emerging business of payments. The CCB further noted that payments banks cannot undertake lending, and therefore believed that the payments bank would not be subject to the same risks as a full service bank.”
The statement added that the CCB “has selected entities with experience in different sectors and with different capabilities so that different models could be tried”.
“Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the Guidelines and move to giving licences more regularly, that is, virtually “on tap”. The Reserve Bank believes that some of the entities who did not qualify in this round, could well be successful in future rounds.”
The “in-principle” approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank.
