Department of Posts to move cabinet note to apply for bank licence
MUMBAI: The Department of Posts will move a Cabinet note in order to apply for a banking license by the stipulated deadline of July 1, a senior official has said, even as a top Finance Ministry went public with doubts over the efficacy of the post office being converted into a bank. "We are moving a cabinet note now and after that we will be applying for the licence. After the cabinet note, we will go ahead with setting up the bank," Postal Services Board's member, planning, Suneeta Trivedi, told PTI here. Trivedi asserted that the Department will be making the application by July 1, which is the last date set by the Reserve Bank for receiving applications.
The department of Posts has engaged consultancy firm Ernst & Young for helping it at the application stage by creating the "whole concept" of the bank and has already gathered all the know-how to enter the fray. However, Department of Financial Services Secretary Rajiv Takru seemed to be not so much interested at the prospect of India Posts entering the banking fray.
There is a lot more to banking than merely having the reach and opening savings accounts, he told reporters, adding that it also involves very complex things at the back end and seemed to suggest that a Japan-like case, where the postal department has a bank, may not work in the country. When asked about the same, Trivdei said, "We have worked out all on the know how, about everything. There is nothing like that" and added that there is no rethink on the part of the Postal department. Sector watchers suggest that if financial inclusion is the ultimate aim in granting new licences in this round, the entry of the department will be highly beneficial to the agenda being pursued by the Reserve Bank and the Government.
Source : http://economictimes.indiatimes.com