Post Bank of India is not yet dead !!!

As per Press Articles India Post did not receive a Bank License from Reserve Bank of India for its Post Bank of India, as the approval was pending before Cabinet Committee on Economic Affairs (CCEA) since January 2014.

This delay is blessing a disguise for NaMo Government. RBI Governor Dr. Raghuram Rajan’s talk at the Annual Day Lecture of the Competition Commission of India on May 20, 2014 at New Delhi indicated the plans for Post Bank of India.

Post Bank of India can be a Payment Bank only. Payment Bank can be described as Banks with a differentiated licence to take deposits and offer payment plus remittance services. The main difference between a Payment Bank and a full-fledged bank, is that a Payment Bank cannot provide Loans and also should invest all its funds in safe instruments viz Government securities.

In this context the proposed Post Bank of India, fits the criteria 100, as the Post Offices can be used outlets to raise deposits and make payments.

Another spinoff of Payment Banks is that commercial banks might be allowed to reduce the quantity of government securities held as part of SLR, as payments banks hold government securities for liquidity purposes.

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