Postal banks globally effective as payment banks nachiket mor
Postal banks globally effective as payment banks: Nachiket Mor
PTI Jan 30, 2014, 08.34PM IST
MUMBAI: Nachiket Mor, a member of the central board of the Reserve Bank of India, today supported the
role of postal banks in promoting the availability of financial services.
"I don't want to speak specifically about India Post (which has applied for a commercial banking licence) itself.
What I am saying is that worldwide, they (postal banks) have been very effective as payment banks," said
Mor, who recently submitted a report on financial inclusion to the RBI.
Mor, a former executive director of ICICI Bank, is also a member of an external panel that is scrutinising the 25
banking aspirant applications.
The panel headed by former RBI governor Bimal Jalan will meet again on February 10. The committee had a
mandate to submit its report before January end, by when Governor Raghuram Rajan had expected to issue
some new bank licences.
Mor was answering a question from the media on whether he supports the application of India Post for a
commercial banking licence. He spoke on the sidelines of a banking inclusion summit organised by a business
Stating that financial inclusion is needed because the country has a small banking system, he said deepening
financial inclusion requires either new banks, which is long, steady and slow process, or expanding the reach of
existing banks. One way to do this is to empower non-banking lenders, who have an important role to play in
inclusion, he said.
The Finance Ministry is not very keen on letting India Post convert itself into a bank, citing practical difficulties,
even though more than 90 per cent of its 1.55 lakh post offices are located in villages.
Postal savings as of last March stood at Rs 6.05 trillion, which is half the total deposits of the nation's largest
bank, State Bank of India.
Last week, Minister for Communications & Information Technology Kapil Sibal said his ministry would ensure
that India Post gets a banking licence.