(iii) The PBI must be professionally managed and operated, with credit and other risks being handled by experienced experts hired from the market. In its own interest, its operations must be fully in line and compliant with RBI Guidelines.
(iv) A new institution, to be called the Post Bank of India or by some other suitable name, should be set up as a commercial bank offering the full spectrum of financial and banking services.
(v) As the owner of the proposed PBI, the Government of India may take decisions as appropriate on structural and organizational issues and other details, including the funding requirements.
(vi) The Task Force is of the view that the PBI should be set up under an Act of Parliament and that establishing the PBI as a statutory institution and a Government Bank would enhance its credibility, insulate it from local pulls and greatly facilitate its operations.
(vii) It is essential to structure the proposed PBI in such a manner as to pre-empt the possibility of outside interests influencing its day-to-day operations.
(viii) The Task Force also recommends that the PBI should initially be set up as a Public Sector Bank wholly owned by the Government of India.
(ix) The initial capital requirement, estimated at Rs. 500 crores as per RBI requirements would be fully funded by the Government.
(x) After the Bank establishes itself in 3 to 5 years, the Board of Directors could take a view on floating an IPO to raise fresh capital.
(xi) The PBI will focus on fulfilling the Government’s mandate of financial inclusion and on bringing the un-banked and under-banked segments of the population, particularly in rural, semi-rural and remote areas within the ambit of the formal monetized economy.
(xii) A view needs to be taken on how best to seamlessly integrate the earlier banking operations into the proposed new structure, The best and seamless method would be to fully absorb the POSB in the new proposed Bank (PBI).
(xiii) The PBI will offer services including credit, which are beyond the remit of the POSB.
(xiv) The PBI will develop financial products and services which are specially tailored to the needs of the rural and urban unbanked population, if necessary in collaboration with other banks.
(xv) The PBI will function as a commercially viable and self-sustaining entity without the need for continuing Government subsidies.
(xvi) After the Initial gestation period, it should generate its own resources and sustain itself in the competitive market environment.
(xvii) The PBI should price its services on a cost plus basis and revise these rates from time to time, so that its operations do not become a continuing and increasing burden on the Government exchequer.
(xviii) The PBI will start with a Head Office Main Branch and will thereafter expand its operations by opening Branch offices in the Metro towns and State capitals, to be manned by banking professionals.
(xix) The longer term objectives would be to establish a Branch Office of the PBI in each District Headquarter over a 3 to 5 year period, to be operated mostly by banking professionals.
(xx) The 150,000-plus Departmental and Branch POs will act as Banking Correspondents for the PBI.
(xxi) Careful consideration should be given to the various types, elements and levels of risk involved in the PBI’s operations.
(xxii) Robust System Protocols and Standard Operating Procedures should be put in place to manage these risks effectively.
(xxiii) The PBI should recruit/commission the services of banking experts to manage its credit, portfolio and market risks.
(xxiv) Appropriate management capabilities should be mobilized from the market and robust systems and processes should be put in place to ensure that Non-Performing Assets are kept within acceptable limits.
(xxv) It is neither necessary nor desirable to mandate a waiting period before the PBI enters into credit and lending operations.
(xxvi) The PBI should be constituted and begin working as a credit and lending Bank immediately, without any trial/waiting/learning period.
(xxvii) The PBI should be set up as an independent Statutory and corporate entity offering the full bouquet services, including credit, to its customers.
(xxviii) The PBI will primarily target currently unbanked and under-banked customers in rural, semi-rural and remote areas, with a focus on providing small and affordable loans and simple deposit products.
(xxix) Customers will be provided with full-fledged Savings Accounts, which can be retained even with zero balances, as provided for in the PMJDY.
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