NEW DELHI: The vast legacy network of India Post, once perceived to be
unwanted baggage and a huge financial burden, is turning out to be its
biggest strength. Top global financial firms Barclays, Citibank,
Deutsche Bank, Western Union, Visa and domestic giants State Bank of
India and Punjab National Bank are among over five dozen companies that
have queued up to partner with the payments bank arm of the country's
postal department.
Even the International Finance Corporation, a member of the World Bank
Group, has shown interest in picking up a stake in the business.
There are nearly 1.5 lakh post offices across the country, and 1.3 lakh in rural India.
A large-scale modernisation drive across these branches, including
computerisation and the gradual rollout of core banking solutions and
ATMs, has attracted big boys of the financial world who are looking at
new opportunities in banking, mutual funds, insurance and money
transfer.
The postal network and services are the backbone for lastmile
connectivity across the country and our efforts at modernization as well
as digitization are bearing fruit," telecom and IT minister Ravi
Shankar Prasad, who is also in charge of the Department of Posts, told
TOI. "With India Post having got a payments bank licence, there is a
scramble to forge partnerships and alliances."
The postal department bagged a licence for a payments bank from the
Reserve Bank of India in August last year. The central bank also allowed
10 other firms and tech companies to operate payment banks, considered
the likely new disruptive force on the financial landscape of the
country. Payments banks can accept deposits up to Rs 1 lakh but cannot
grant loans.
They can deposit their money in government bonds and issue debit cards
but not credit cards. These banks are expected to spread financial
inclusion across the country and bring down cost of remittance and fund
transfer.
The interest in partnerships with the postal department comes against
the backdrop of the success that India Post has achieved after tying up
with over 800 e-commerce companies, including Flipkart, Snapdeal and
Amazon.Parcel revenue, which registered a dip of 2% in 2013-14, grew 45%
in 2014-15 and a staggering 100% till February in 2015-16.Those seeking
an alliance with India Post for banking products and services include
SBI, PNB, BoB, Union Bank, and IDBI Bank. Foreign aspirants include
Barclays Bank, Deutsche Bank and HSBC.
In the queue for an alliance on the insurance business are HDFC Life,
ICICI Lombard, ICICI Prudential, Bajaj Allianz, Kotak Life Insurance,
Royal Sundaram and PNB Metlife.
Source: THE TIMES OF INDIA
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