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India Post's bank to miss September date for opening branches

System integrator search delays launch

Kiran Rathee  |  New Delhi 

India Post

(IPPB) is sure to miss the September deadline that it had set for itself to open 650 across the country. India Post, the government-operated postal system in the country, failed to get a (SI) on board on time, upsetting its payments bank schedule. 

The Department of Posts, one of the 11 entities to get in-principle nod from the Reserve Bank of India (RBI) in 2015 for payments bank, launched a pilot service in Raipur and Ranchi this January. Though armed with a bank licence, the department couldn’t go beyond a pilot, as it struggled to find a company to take care of its tech infrastructure needs. Only recently, India Post awarded the contract to US tech giant HP.

“We really ran into issues fixing the system integrator,’’ Postal Secretary told Business Standard. According to the mandate of the RBI, the payments bank has to run mostly digital. “SI, which will integrate all features, has to be there first and that we were not able to fix,” he said.

When the department first issued a request for proposal (RFP), last September, to select a SI, just one company applied, which resulted in the bid failing. When the RFP was issued again in October, around 28 participated in the pre-bid conference, raising the hopes all around. Finally, two — HP and FIS (Fidelity) — sent their bids. 

Last month, the contract was awarded to HP.

It was not lack of interest, as many participated in the pre-bid conference and sought details about the project.

According to Nanda, not many had the capability to execute such a big and complex project in a short time.

Mandate of the SI was to take care of the end to end technical solution of the payments bank. The architecture was difficult to set up in a short period of time, he added.

Another official explained that the SI will have to integrate all the functions of the bank along with the operations of around 30 vendors into one system. HP, which has won the bid, has got about 30 vendors which will be integrated into one system. Despite the delay in launching the service, Nanda didn’t agree that India Post had lost the first mover advantage (Bharti Airtel and Paytm had already started their banks). The model of is very different as they have got a wider reach, he said. India Post has 155,000 post offices across the country, with presence in most rural areas. 

“We have the connect to the grassroot…just because somebody has got a telephone number and that telephone number is converted into an account does not mean deposit, withdraw and third party offerings…. So, it has a whole lot of things where connect is most important, that is what we have and it is our business model,” Nanda said.

In fact, thousands of dak sevaks and postmen will be given handheld devices with which they will visit potential customers to carry out banking functions. “It’s like the bank is going to every household,” an official explained.

Bumpy road

  • 2015: Department of Posts gets “in-principle” approval from the Reserve Bank of India to set up a payments bank
  • Jun 2016: Cabinet clears proposal to set up (IPPB). Corpus: Rs 800 crore
  • Jan 2017: Communications Minister Manoj Sinha launches IPPB as a pilot in Raipur and Ranchi. It was announced that 650 will be set up by September


  • Sep 2016: A request for proposal issued to select a that would integrate all IPPB features. But only one bid made
  • Oct: Another tender issued; two — HP, FIS (Fidelity) — bid
  • Jul 2017: HP given the contract

First Published: Wed, August 09 2017. 01:21 IST
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