India Post plans to enter banking space

The Indian postal department plans to enter banking business after the RBI came out with guidelines for new bank licences. Sources said the Department of Posts with strong presence in rural areas has appointed Ernst and Young as consultant for the proposed ‘Post Bank’.

An official at the Ministry of Communications and Information Technology said, “Ernst and Young is expected to submit detailed project report by April 2013, after which all necessary measures will taken up to apply for banking licence.” The department may need Cabinet approval for setting up a bank.

Of the 1.55 lakh post offices, around 24,000 district offices may be ready to offer banking services in next two years. Post offices are being enabled by core banking solution’s connecting nationwide branches as part of an transformative IT project. The department is in the process of setting up 1,000 ATMs.

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