The Department of Posts (DoP) will soon approach the Reserve Bank of India for interoperability of its ATMs with commercial banks as it looks to roll out 10,000 ATMs across the country by the end of this year.
A DoP official told PTI that Communications and IT Minister Ravi Shankar Prasad has asked the department to take the proposal to the RBI on priority basis as it will help popularise banking in rural areas.
The official added that India Post will be rolling out 10,000 ATMs and 20,000 micro-ATMs across the country by the end of this year.
Interoperability of postal ATMs will help people to people use these ATMS (at post offices) to transact with their bank accounts too. Currently, these ATMs can be used only by those having an account with the post office.
The government wants to leverage the vast network of India Post for implementing the mandate of financial inclusion and it has received renewed momentum from the Budget proposals.
Finance Minister Arun Jaitley has announced in his Budget speech for 2016-17 that to provide better access to financial services, especially in rural areas, the government will undertake a massive nationwide rollout of ATMs and micro-ATMs in post offices over the next three years.
The DoP has already announced plans to open 1,000 ATMs by March.
India Post has more than 576 ATMs across the country and has also overtaken the State Bank of India to become India’s largest core banking network having 18,231 branches.
By March, all the 25,000 departmental post offices would offer the ‘Anywhere Banking’ facility using core banking solutions.
As on February, India Post has issued 1,26,181 ATM/debit cards to its account-holders.
Payments bank
The Public Investment Board has already approved the ₹800-crore proposal from India Post for setting up a payments bank. PIB, under the Finance Ministry, vets the investment proposals by state-run entities.
The department is also in the process of finalising the selection of a consultant for setting up of the India Post payments bank, which will primarily target unbanked and under-banked customers in rural, semi-rural and remote areas, with focus on providing simple deposit products and money remittance services.
The pilot for the payments bank is set to start from January and full-fledged operations may start by March 2017.
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 RBI has granted payments bank permit to the department, which is already present in the financial services space with 1.55 lakh branches across the country.
(This article was published on March 3, 2016)