A recent press report said that the plan of setting up automated teller machines (ATMs) by India Post was not allowed by the Reserve Bank India. As per norms of RBI only banks are allowed to set up ATMs and this made RBI to oppose the ATM set up plans proposed by India Post. According to the sources from the banking industry, India Post should come under the scope of RBI regulations if it has to open ATMs.
Post Bank of India, a subsidiary of India Post has been proposed to be set up by the India Post to provide banking facilities. It has also planned to set ATMs initially in nearly 1000 post offices, out of its 1.5 lakh post offices.
The Department of Post has planned to launch banking solutions, set up ATMs and issue debit cards to its customers in order to increase the efficiency and profitability. The Department has begun the process of modernizing information technology. In this facet, it is working to establish core banking solution by 2012.
The Department of Post has also planned to make tie ups with banks and to help their customers to use India Post debits cards in ATMs. The proposal has been submitted to the Ministry of Finance for approval with the idea to extend financial services to rural areas which lacks banking services.
The RBI worried over high inflation, has recently raised key interest rates by 25 basis points, which is its 12th such hike since March, 2010. The hike has made auto, home and other loans more expensive.