ABOUT POST BANK
The savings banks scheme has a whopping cash balance of about Rs 6 lakh crore and about Rs 22.5 crore accounts. It also includes more than a million of senior citizens’ savings schemes. The most striking part of this is that 89 per cent of it serves the country’s rural areas. Significantly, all this money is lent to state governments (its main source of public borrowing) and not to loss-making airline companies. The postal system also runs a low-premium Postal Life Insurance scheme serving about 1.69 crore people. In the last two years, the Department has invested about 10-20 per cent of the premiums in mutual funds with considerable success. Its portfolio managers are as good or better than that of the regular banks. How will the Post Bank of India work? For the Post Bank of India, the postal department will set up a non-operating financial holding company which will float the bank, which will be a private entity. it will have about 150 branches for which the head post offices will be a correspondent. The access of the network will go all the way down to the neighbourhood post office. The bank will have various products and services that will strengthen financial inclusion. The idea, for which everything is ready, is about real financial inclusion that the existing banks will never be able to achieve in near future. All that it requires from the government is an investment of Rs 700 crore. Reportedly the RBI governor Rahguram Rajan will meet with finance minister Chidambaram before announcing the licenses. If Chidambaram raises his ministry’s objection, Rajan will have to either drop the license or defy the government, although the latter is quite unlikely.
The savings banks scheme has a whopping cash balance of about Rs 6 lakh crore and about Rs 22.5 crore accounts. It also includes more than a million of senior citizens’ savings schemes. The most striking part of this is that 89 per cent of it serves the country’s rural areas. Significantly, all this money is lent to state governments (its main source of public borrowing) and not to loss-making airline companies. The postal system also runs a low-premium Postal Life Insurance scheme serving about 1.69 crore people. In the last two years, the Department has invested about 10-20 per cent of the premiums in mutual funds with considerable success. Its portfolio managers are as good or better than that of the regular banks. How will the Post Bank of India work? For the Post Bank of India, the postal department will set up a non-operating financial holding company which will float the bank, which will be a private entity. it will have about 150 branches for which the head post offices will be a correspondent. The access of the network will go all the way down to the neighbourhood post office. The bank will have various products and services that will strengthen financial inclusion. The idea, for which everything is ready, is about real financial inclusion that the existing banks will never be able to achieve in near future. All that it requires from the government is an investment of Rs 700 crore. Reportedly the RBI governor Rahguram Rajan will meet with finance minister Chidambaram before announcing the licenses. If Chidambaram raises his ministry’s objection, Rajan will have to either drop the license or defy the government, although the latter is quite unlikely.
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