How does the entry of the Department of Posts as payments bank change things?

The Department of Posts—which did not make the cut to be a small bank—is the only government entity in the list. It could well be the elephant in the room, since it already has a huge national presence—of the 1.54 lakh post offices in the country, 1.39 lakh (89.8%) are in rural areas. That’s a huge advantage because, apart from reaching consumers faster, many could well be existing consumers. In addition to taking deposits, it also offers postal life insurance and is a distributor of mutual funds. The outstanding balance under the post office savings scheme as of March 31, 2014, was Rs 6.05 lakh crore. India Post, which is in the process of networking its branches, could soon emerge as the biggest challenger to the new payments banks.