India post is not allowed to set up ATM

By | September 6, 2011

According to a recent press report banking regulation is not supposed to set up an Automated Teller Machine (ATM) in the post office. India Post had planned to set up automated teller machines (ATMs) in its post offices but it has failed to get the acceptance from a banking regulator. India Post is in talks with the Reserve Bank of India (RBI) to set up ATMs. According to the norms of RBI, only banks are having allowed to set up ATMs.

The central bank is not in favor of allowing India Post to set up ATMs. According to sources in the banking industry, if India Post sets up ATMs, they will have to fall under the control of the RBI for regulation purposes. India Post has expected to set up a subsidiary, Post Bank of India, for providing banking facilities. It has also identified nearly 1,000 post offices, out of its 1.5 lakh post offices, where the ATMs would be initially set up.

Reports said that the main reason for India post to enter into the banking solutions and set up ATMs and debit cards for its customers is to increase efficiency and profitability. It has also planned to introduce core banking solution by 2012, and has initiated the process of modernising information technology (IT) during the current financial year. The department of post also has plans to tie up with banks to enable the customers to use their India Post debit cards at ATM machines.

India Post already offers financial services, including post office savings schemes, postal life insurance, pension payments and money transfer services.

The RBI is in its struggle to control inflation is hiking the key policy rates which have made it mandatory for banks to hike their lending rates. The hike in lending rates has made home loan and other retail loans dearer to the borrowers.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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