India Post's banking application: RBI lobs ball in government's court

India Post's banking application: RBI lobs ball in government's court

MUMBAI: Reserve Bank Deputy Governor R Gandhi today said the Union government has to take a final call on application for banking licence by the India Post, which has a network of over 1.5 lakh post offices countrywide.

"India Post is in the hands of the government. It is the government which has to approve them to come to us for licence," Gandhi told reporters here.

RBI, which approved only two names out of the 25 applicants in February this year, had left it to the government to decide on the way ahead with India Post's application.

According to reports, the Ministry of Finance, which controls 27 state-run commercial banks, is averse to the idea of the postal department getting into banking.

The RBI says that deepening the financial inclusion is a key objective of granting more licenses and according to some experts the existing network of India Post makes it an ideal candidate.

Meanwhile, on payment and differentiated banks, Gandhi said RBI has received a slew of suggestions on the draft guidelines and is analysing them. He reiterated that this is a priority area for the central bank and it will come out with final guidelines by the end of the year.