Almost 20 commercial banks have started talks with the postal department for a strategic partnership with India Post Payments Bank, the proposed payments bank. The Department of Posts is one of the 11 applicants that received the approval from the RBI to propose a payments bank. This partnership will involve those payments banks that are sourcing loans for the commercial banks. The commercial banks will provide the credit cards to the customers of the payments bank.
PN Ranjit Kumar, the Postmaster General of Mumbai stated that all the payments banks are believed to get into collaborations or alliance with leading banks or other financial institutions. Many commercial banks have demonstrated interest to abstain from the partnership with the India Posts Payments Bank. But, it is premature for the latter to consider the tie-ups right now.
The payments banks are believed to use technology to provide cheap and quick remittance service to their customers. Most banks fear that they eat into their business. Going by the regulations, the payment banks can gather maximum deposits of Rs 1 lakh, offer third party transactions and debit cards. They cannot offer loans or credit cards.
Including IDBI Bank and State Bank of India, India Post has got 20 proposals. As per the Chairman of SBI, Arundhati Bhattacharya, it is too premature to discuss about the matter. She stated that there can be a threat in some regions, but it can open new opportunities in some others.
IDBI Bank is in discussion with the NSDL (National Securities and Depository) that also received a payments bank license. The bank being the founding promoter with around 30 percent stake of NSDL has come out as one of the biggest players in the depository business. It was stated by the CEO and MD of IDBl Bank, KP Kharat stated that the discussions with NSDL and India Post are at the early stage.