Only a year after its launch, the condition of India Post Payment Bank has started deteriorating. The company also has no money left to pay salaries to employees. This is because the bank is not getting the kind of business that was expected. Now the Department of Posts has sought permission from RBI to convert it into a small finance bank.
Problems are coming due to this
The postal department says that a payment bank cannot deposit more than Rs 1 lakh. With this, the bank cannot lend to anyone. An official said that the bank is not earning as much from this. Now the bank is hopeful that RBI may approve to convert to small finance bank by next year.
One thousand crore rupees spent
According to Swarnim Times report, a thousand crore rupees were spent on technology only to start a payment bank. This expenditure includes the bank’s core banking system and other technologies. Apart from this, Rs 250 crore was spent on salaries and other allowances of employees. Now India Post has also banned new recruits in the payment bank. The department hopes that the government will invest capital in it separately, so that the company’s expenses keep running.
Raghuram Rajan started
Payment Bank was started by Raghuram Rajan. This was his experiment, in which some banks were created that would not give loans to anyone. Apart from this, only one lakh rupees can be deposited in accounts. Through these banks, the objective was that people could get banking services easily even in remote areas. Initially, 11 companies were given the license to start a payment bank, out of which five had withdrawn the license. An India Post official argues that it is not getting any benefit due to small transactions. Still people cannot pay big bills. In this case, this model is not working properly. Banks can also give loans to any farmer, small industries and other unorganized sectors by changing to small finance bank. IPBB was launched with 650 branches. Along with this, 3250 access points were built in post offices. Apart from post offices, postmen were also trained to provide banking services.