Letters: Problems for Post Bank

This refers to the report "Post Bank to get professionals from private sector" (May 11). The Post Bank of India's (PBI) proposal to establish a payments bank is good. In fact, the PBI was eager to set up a universal bank but the Ministry of Finance sent out a strategic hint to the Ministry of Communications to opt for payments bank. That was a good move. Even for payments bank, the PBI will face tough competition from some telecom operators.

Of all the issues, the PBI's plan for recruiting top professionals from the private sector could remain only a dream. First, the business model of payments banks is such that they don't need the kind of top professionals needed in managing a universal bank. Second, the PBI would not be able to offer the remuneration packages offered by the new payments banks in the private sector. The PBI should remember that while it derives its strengths from government ownership, a host of weaknesses stem from the state-ownership. Even after more than 100 years of experience, the postal department has not been able to break-even and depends on the government to fund its deficits.

K V Rao Bengaluru

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