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Postal Bank to come into existence soon

Raghuram Rajan, governor, RBI, said there will be new banks coming into existence in the country in the coming years, including one promoted by the department of posts. Speaking at the 80th anniversary of RBI, he said the coming years will see many new players in the banking eco-system, such as payments banks, small finance banks and possibly a postal bank competing with existing universal banks, regional rural banks, cooperative banks and a variety of non-bank finance companies. The department of posts has already applied for a payments bank licence after RBI initiated the licensing process. A task force under T S R Subramanian for suggesting ways to leverage the post office network has recommended that the government set up a holding company under the department of posts for immediate roll-out of banking, insurance and e-commerce services through its 155,000 post offices. The task force had submitted its recommendation in December. The governor also said the central bank has successfully developed a liquid government bond market, which gave the government the confidence to think of issuing 40-year bonds.

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