The Department of Posts will move a Cabinet
note in order to apply for a banking license by the stipulated deadline of July
1, a senior official has said, even as a
top Finance Ministry went public with
doubts over the efficacy of the post office being converted into a bank. "We
are moving a cabinet note now and after that we will be applying for the
licence. After the cabinet note, we will go ahead with setting up the
bank," Postal Services Board's member, planning, Suneeta Trivedi, told PTI . Trivedi
asserted that the Department will be making the application by July 1, which is
the last date set by the Reserve Bank for receiving applications. The
department of Posts has engaged consultancy firm Ernst & Young for helping
it at the application stage by creating the "whole concept" of the
bank and has already gathered all the know-how to enter the fray. However, Department of Financial Services Secretary Rajiv Takru seemed to be not so
much interested at the prospect of India Posts entering the banking fray. There
is a lot more to banking than merely having the reach and opening savings accounts, he told reporters, adding
that it also involves very complex things at the back end and seemed to suggest
that a Japan-like case, where the postal department has a bank, may not work in
the country. When asked about the same, Trivdei said, "We have worked out
all on the know how, about everything. There is nothing like that" and
added that there is no rethink on the part of the Postal department. Sector
watchers suggest that if financial inclusion is the ultimate aim in granting
new licences in this round, the entry of the department will be highly
beneficial to the agenda being pursued by the Reserve Bank and the Government.
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