With India’s postal department receiving the Reserve Bank's nod to set up non-lending payments banks in August 2015, the UK-based Barclays PLC BCS seems interested in forming a partnership with the former with an aim to broaden its customer base. The news was first reported by Bloomberg.
Other global banks such as Deutsche Bank AG DB along with domestic lenders like State bank of India, HDFC Bank Ltd. HDB and Yes Bank are among the 17 companies, which are looking to partner with India Post Payment Bank (“IPPB”) to utilize the postal service’s network to provide financial services across the country.
The Department of Posts was one of 11 entities that won “in-principle” approval from the central bank for a payments banking license. The payments bank licence will enable the network of around 1,54,000 post offices to offer banking services to India.
It will allow the postal department to collect deposits, offer Internet banking, facilitate money transfers and sell insurance and mutual funds. However, a unit of the department will offer the services initially through 500 branches and will eventually spread out the operation across the country.
By collaborating with the postal department, Barclays looks forward to gain access to areas where it does not have a physical presence. Moreover, a partnership will ensure lenders and insurers, a wide distribution of their products and services via the large postal network throughout India.
Barclays also plans to offer cash-management services to clients through the postal network of India. In cash management, a bank collects and disburses cash and manages surplus funds to support a corporate customer’s day-to-day operations.
Currently, Barclays carries a Zacks Rank #3 (Hold). A better-ranked foreign bank is BBVA Banco Francés S.A. BFR, which sports a Zacks Rank #1 (Strong Buy).
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