Payments bank: DoP pilot project likely to start in Jan

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The Department of Posts (DoP) is likely to start pilot project of its payments bank services in January at select location including Bihar. "The pilot project of payment bank is likely to start in January. The Department of Posts has informed minister (Ravi Shankar Prasad) about tentative dates," a source told the agency.

The Reserve Bank of India has granted payment bank permit to the Indian postal department, which has 1.55 lakh branches across country and already provides financial services. The Department has approached Public Investment Board for approval of Rs 292 crore fund that will be required for starting operations of payment bank. "After approval from PIB, it will be placed before the Cabinet which is very likely to be in November," the source said.

The Department has shortlisted six consultants including McKinsey, KPMG, Ernst and Young and PricewaterhouseCoopers to advice it on setting up of payment banks. "The tender to appoint consultant for the project will be closed in a week. The consultant will then prepare entire roadmap for rolling out payment bank," the source said.

World Bank, State Bank of India, leading corporate houses in telecom space have shown interest in partnering with the postal department for its payment bank services, the source added. "There will be around 600 branches of Payment Bank that will be set up initially. This will include 50 branches in Bihar," the source said.

The postal department computerised about 25,000 of its departmental post offices but rural post offices will be provided handheld devices for digitalising records. The handheld devices will also be rolled out soon which will be used initially to facilitate e-commerce transactions in rural areas and later extended for payment bank services, the source said.