India Post has received payments bank licence from the Reserve Bank of India to start rollout of banking operations commercially under the permit.
"India Post has received payments bank licence. The service will be launched as per schedule," a Department of Posts official said.
Payments banks can accept deposits up to Rs. 1 lakh per account from individuals and small businesses.
The new model of banking allows mobile firms, supermarket chains and others to cater to banking requirements of individuals and small businesses. It will be set up as a differentiated bank and will confine its activities to acceptance of demand deposits, remittance services, Internet banking and other specified services.
In 2015, RBI had granted 'in-principle' approval to 11 entities, including Department of Posts, to set up payments banks and proposed to give such licences 'on tap' basis in future.
However, Tech Mahindra, a consortium of Sun Pharmaceutical Industries Ltd promoter Dilip Shanghvi, IDFC Bank Ltd and Telenor Financial Services and Cholamandalam Investment and Finance Co. backed have dropped their plan to roll out payments bank.
Out of eight companies in fray - Airtel has launched its commercial operation across India with an investment of Rs. 3,000 crores offering interest rate of 7.25 percent on deposits, free money transfer from Airtel to Airtel numbers within Airtel Bank, money transfer to any bank account in the country.
Others are - Aditya Birla Nuvo, Fino PayTech, National Securities Depository, Reliance Industries Ltd nd Vodafone m-pesa.
AP Singh has been appointed as interim MD and CEO of the India Post Payments Bank. He was Joint Secretary in the Department of Disinvestment and one of the member of founding team that launched Aadhaar.