India Post will send a proposal to Reserve Bank of India for its ATMs to work on the platforms of all other banks
People will soon be able to withdraw money from any bank account through the automated teller machines in post offices as they take their first step towards becoming bank branches.
India Post, which has a licence for a payments bank, will send a proposal to the Reserve Bank of India for allowing its ATMs to work on the platforms of all other banks.
“We will soon send a proposal for interoperability of ATMs with other banks. This will mean upgrading the technology in our existing ATMs,” said a department official.
Payments banks provide services like demand deposits and remittances but are not allowed to lend.
They can issue ATM and debit cards but not credit cards.
Minister for Communications and Information Technology Ravi Shankar Prasad is keen to revive India Posts.
Around 600 ATMs have been installed across the country and the target is to take this to 1,000 by March and 10,000 in the next couple of years.
“The plan is to have one ATM each in all the 155,000 post offices, of which 130,000 are in rural areas,” the official said.
The Public Investment Board has approved a Rs 800-crore (Rs 8-billion) proposal from India Post for setting up a payments bank and is finalising a consultant.
The payments bank is expected to start operations by March 2017 and will later be converted into a full-fledged bank.
The Budget for 2016-17 has announced a massive rollout of ATMs and micro-ATMs in post offices over the next three years.
Till February, India Post had issued 126,181 ATM and debit cards to its account holders.
Around 25,000 post offices have been brought under the core banking system, which allows users to operate their accounts from any post office.
Core banking will be implemented across all post offices by next year.
The technology upgrade will cost Rs 5,000 crore (Rs 50 billion).
Commercial banks and institutions, including Deutsche Bank, State Bank of India, Punjab National Bank, Axis Bank, YES Bank and IDBI Bank are interested in partnering India Posts for its payments bank venture.
