Government to register postal bank by year end

The government is likely to register the postal bank by the end of the year while a pilot for payment services will be launched around January 2017.

As per the Officials, the bank will be an independent company with initial corpus of Rs 300 crore and the new entity will enter into revenue sharing model with the Department of Posts (DoP).

The Reserve Bank had granted in-principle approval to 11 applicants, including DoP, in August to set up payments banks.

As per RBI guidelines, payments banks would offer a limited range of products such as demand deposits and remittances. They will not be allowed to undertake lending activities and will initially be restricted to holding a maximum balance of Rs 1 lakh per individual customer.

They will be allowed to issue ATM or debit cards as also other prepaid payment instruments, but not credit cards.