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Post Bank may be set up by act of Parliament

The Indian Post Bank should be created through an act of Parliament, feels a task force set up to suggest ways to turn around India Post. The task force feels the department can easily leverage its network of 1,55,000 post offices, furthering the government’s plans of financial inclusion. The panel headed by T.S.R. Subramanian, former cabinet secretary has also suggested creation of a holding company 100%-owned by the department of posts, with commercial subsidiaries for postal bank, e-commerce, insurance, delivery of various government services including Aadhar, ration cards and Kisan Vikas Patra, and distribution of third party products, such as bill collections and payments. The task force’s view clearly indicates that the department need not approach the RBI for license. The bank must be professionally managed and operated, with credit and other risks being handled by experienced experts hired from the market, the task force said in its report, adding in its own interest, operations must be fully in line and compliant with RBI guidelines, the report added. It has also suggested an initial capital investment of Rs 500 crore for the postal bank, which can come from the government. The proposed banking services will use existing infrastructure of about 155,000 post offices, which will function as business correspondents for the postal bank. The task force was set up by prime minister Narendra Modi in August.

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