INDIA POST BANK TO OPEN DOORS IN MARCH 2017 WITH INFOSYS FINACLE

India Post Bank has been given the go-ahead to start processing payments in 2017 following a number of lengthily delays.

The post office’s financial services are seen as a viable provider for India’s rural population, of which a majority do not have access to banking.

230 million Indians, however, do hold savings accounts with the Post Office, which has 139,144 locations across rural areas of the country.

Ravi Shankar Prasad, union minister for communications and IT, announced that a March 2017 start date had been fixed for the banking arm to begin processing. He also noted Deutsche Bank and the World Bank had expressed interest in partnerships.

Waiting times

India Post has been waiting a long time for the green light to set up its own bank. It originally planned to start offering services in March 2014 as part of an enterprise-wide transformation fuelled by Infosys’ Finacle core system.

Finacle was selected by the company following a process that began in 2010 and was charged with turning post offices across India into ‘mini banks’ catering to an average of 7,000 customers each.

 

The project, which cost around $125.3 million, had an initial completion date of July 2014.

Stumbling blocks

India Post encountered a number of stumbling blocks, however, most notably when the country’s finance ministry opposed the banking services plan in February 2014, claiming the company did not have the necessary expertise to become a bank proper.

Ageing data – with some tables up to 100 years old – and a worry about Post Bank customers and tellers being confused with the modern Finacle system were among other pressing concerns.

The Reserve Bank of India has since brought about the reversal of the finance ministry’s decision and come out in favour of the plans.

Pilot plans

India Post has already run a number of pilot projects in Assam, Uttar, Pradesh and Maharashtra to test the capabilities of its new system.

With 41% of India’s population not using banking services, it is hoped that the 2017 go-live will encourage financial inclusion across the country.