Govt to invest Rs 400 crore in India Post payments bank

Even as players quit the race to set up payments bank, the government has said that it will be investing Rs 400 crore to set up India Post’s payments bank.

“The government will be investing Rs 400 crore in India Post’s payments bank. Further capital required in the bank will be through the form of equity,” Union Minister for Communications and Information Technology Ravi Shankar Prasad said.

The payments bank will be operational by March 2017, Prasad said, adding that many global firms including World Bank, Citibank, Deutsche Bank, Barclays and others have evinced interest in partnering with the India Post payments bank.

Tech Mahindra, Cholamandalam Investment and Dilip Shanghvi and his partners decided against setting up payments bank.

The minister also stated that the ecommerce market and the Digital India economy in the country is set for a big leap ahead. “I believe that the ecommerce market in India, which is today $21 billion should easily cross $40 billion in the next 2-3 years,” Prasad said.

“As far as the Digital India economy is concerned, it will be $1 trillion in the next five years. This will include $400 billion in electronic manufacturing, $350 billion in IT and IT services and $250 billion in communication,” Prasad added.