In a move to fulfill PM Modi’s goal of including poorest of the poor into the banking system, RBI governor Raghuram Rajan announced setting up of Postal Bank of India (PBI) on 02nd April. The bank will enable the government to capitalize on the infrastructure and distribution network of the department of posts to further its plan of financial inclusion.
Speaking on the occasion of commemorating 80 years of the central bank, the governor said, “In the coming year, we will have many new players in the banking eco-system, such as payments banks, small finance banks and possibly a postal bank competing with existing universal banks, regional rural banks, cooperative banks, and a variety of non-bank finance companies.”
In tune with the government’s vision to set up PBI, the postal department applied for a universal banking license once the RBI initiated the process of issuing fresh banking licenses to increase the number of players in the banking sector.
The government has also appointed a taskforce headed by T S R Subramanian for suggesting ways to leverage the existing infrastructure of 155, 000 strong post office network for banking purposes. In order to float the new bank, it is likely that the government will set up a holding company under the department of posts. This holding company will then offer banking, insurance and e-commerce services.
Also speaking on the occasion was FM Arun Jaitley who praised RBI’s efforts in managing monetary policy, inflation and interest rates.
“Talking about financial inclusion,” the finance minister said “the Prime Minister's Jan-Dhan Yojana was a tremendous success and added that the next phase of the challenge was to provide a certain amount of social security to the holders of these accounts in terms of accident and life insurance and an alternative pension system for the under-privileged sections with the support of public exchequer, banking system and other institutions.”