Communications and Information Technology Minister Ravi Shankar Prasad on Friday said the proposed Post Bank of India will be a "game changer". It will take financial inclusion to a new level, he said while addressing the heads of circles of the postal department.
Here's all you need to know about the Post Bank of India:
1) "Post offices must gear up for this," Mr Prasad said on Thursday. His comments hint at the fact the India Post could be close to earning a banking licence from the Reserve Bank of India (RBI).
3) Once the Post Bank is set up, the government plans to take it public or gradually increase public participation to raise funds after converting the vast post office network into a commercial bank.
4) India Post has 1.4 lakh rural branches, while all other banks put together have about 35,000 rural banks most of which are not in rural panchayat towns.
5) Prime Minister Narendra Modi had set up a task force in 2014 to leverage the postal network in India and to enhance the role of India Post in financial inclusion, among other services like delivery of goods for e-commerce firms.
6) The task force's report suggested that the government should set up a holding company under the Department of Posts for immediate roll out of banking, insurance and e-commerce services by the 1.55 lakh strong postal network.
7) The panel suggested establishing Post Bank of India as a separate entity with a branch in each district in the first three years with initial capital of Rs 500 crore to be funded by the government.
8) Post Bank of India and the Jan Dhan financial inclusion scheme can complement each other, former Cabinet Secretary TSR Subramanian, who headed the task force, had said.
9) The idea of Post Bank of India was first mooted in 2006, when it was announced that India Post would open a bank to erase its Rs 1,000 crore deficit during the 11th Five Year Plan.
(With inputs from PTI)