India’s massive postal network is likely to turn into payment banks by late next month, reaching out to the unbanked section of the society under Prime Minister Narendra Modi’s Jan Dhan programme. Top officials said they expected the Reserve Bank of India to grant a payment bank licence to India Post, reports The Telegraph. A payment bank accepts deposits only. The credit part is handled by other banks on behalf of the payments bank. The postal department has decided to rope in professionals from the private sector for top positions at Post Bank of India (PBI).  The Indian postal network has 1, 54,822 post offices. Of these, 1, 39,086 are in rural areas and 15,736 in urban regions. India Post’s entry into the banking space will impact rural banking because of its massive reach in small towns and villages of the country. The proposed PBI may also get listed on bourses to raise funds, according to the Department of Posts (DoP). The postal banks are proposed to be owned by the DoP but with an independent board, governance structure and operations. It will have representation from the ministries of finance and communication and IT.

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