20 commercial banks are after India Post Payments Bank, know why

Have you ever wondered the reason behind the sudden interest that commercial banks are showing for the payments bank of the Department of Post? About 20 of them have contacted the department for a strategic tie-up with its proposed payments bank, India Post Payments Bank.

The department has recently been approved by the Reserve Bank of India (RBI) to float a payments bank and this is the reason why these 20 commercial banks have approached it. As per the tie-up, payments banks will source loans for commercial banks which will in turn offer credit cards to customers of payments banks.

This is making every payments bank to get into some kind of alliance with leading banks. Payments banks are likely to ride on technology to offer cheaper and quicker remittance service to customers.

According to media reports, India Post has received 20 proposals so far, including from the State Bank of India and IDBI Bank. It is also in talks with National Securities and Depository (NSDL), which too has received a payments bank licence.

(Image: Indiatimes)