The Cabinet Committee on Economic Affairs approved the IT Modernization Project – Phase-II proposal of the Department of Posts. The decision is to computerize all the Departmental and Grameen Dak Sevak (GDS) posts offices in the country. The approval has also been accorded for creation of IT infrastructure including establishment of Data Centre, Networking of the Departmental post offices, development of scalable, integrated and modular software for all the operations of the Department of Posts. The Project will be implemented over a three year period covering 2010-11, 2011-12 and 2012-13.
The total expenditure involved in this project will be Rs.1877.20 crore and it will cover all the Post Offices throughout the country in all the State and Union Territories. The Department of Posts will be floating tenders for procurement of hardware and development of software. Pilots will be held in rural and urban post offices. The final roll out will be completed by September 2012.
Handheld devices will be provided to all the Grameen Dak Sevak (GDS) Post Offices in the rural areas and necessary software application developed. Banking solution will be implemented for the Post Office Savings Bank (POSB) scheme. Software Integration solutions will be developed for mail operations enabling tracking solutions for all registered and Speed Post articles.
The Postal Life Insurance services will be available in all the Post Offices including rural pot offices in the country through computers and rural ICT devices. Comprehensive training will be given to staff in Customer relations, application, IT management and system training skills.
Background: The Post Office presently handles 654 crore pieces of mail annually. POSB has a corpus fund of Rs.5,63,000 crore. Significant trends like liberalization and globalization; urbanization, increased demand for financial services, increased funding by government for weaker sections and rural sector, make it imperative that India Post develop new processes and supporting technology.
Source : Press Information Bureau
August 31, 2010
August 28, 2010
PLI/RPLI premium can be paid anywhere in the Country without transfer of the policy file.
As per the existing provisions, PLI premium can be paid at any Post offices in the Circle from which the Postal Life Insurance policy was procured. RPLI premium can be paid only at the post offices from where the policy was procured. However there was provision to make payment of premium in Post offices in other Circles in the case of PLI and in other post offices in the case of RPLI only after transfer of policy which is a cumbersome process and time consuming. (The file concerned should be transferred to the Circle in case of PLI or Region in the case of RPLI. The insurant will be informed about the transfer and the insurant should show the letter of transfer to the new post office for accepting the premium. Then only, the premium will be accepted).
Now PLI Directorate has permitted all the computerised post offices in the Country to accept PLI or RPLI premium without transfer of policy. It is a welcome issue. There will be remarkable decrease in the paper work and the insurants will be benefited.
However, the counter PAs should collect the premium with proper care to enter correct policy number without mistake as there will be no online validation of the policy number. In case, the policy number is entered incorrect, the premium will still be accepted by the system, but will be kept as 'Unposted'.
Now PLI Directorate has permitted all the computerised post offices in the Country to accept PLI or RPLI premium without transfer of policy. It is a welcome issue. There will be remarkable decrease in the paper work and the insurants will be benefited.
However, the counter PAs should collect the premium with proper care to enter correct policy number without mistake as there will be no online validation of the policy number. In case, the policy number is entered incorrect, the premium will still be accepted by the system, but will be kept as 'Unposted'.
Use of Biometric Identification System for TPDS
Some States/Union Territories (UTs) such as Andhra Pradesh, Haryana, Karnataka, Delhi and Chandigarh have taken up implementation of Biometric Identification System for Targetted Public Distribution System (TPDS).
Central Government has approved implementation of a pilot scheme on Smart Card based delivery of essential commodities under Targeted Public Distribution System (TPDS) in Chandigarh Union Territory (UT) and State of Haryana. Under the scheme, the existing ration cards will be replaced by Smart Cards which will have biometric features (fingerprints) of adult members of beneficiary families, based on which verification of genuineness of the beneficiary family will take place and only thereafter the essential commodities will be issued to them from the fair price shops. After implementation of the scheme in pilot States, it will be evaluated so as to assess the cost benefits, suitability of technology and the feasibility of replicability in other States/UTs.
Government of Kerala has recently submitted a proposal for Central financial assistance for implementation of Biometric Identification based Integrated Public Distribution System. After the evaluation of the pilot scheme, it will be considered to be rolled out in other States/UTs, including the State of Kerala.
This information was given by Prof. K.V. Thomas, Minister of State for Agriculture, Consumer Affairs, Food and Public Distribution, in written reply to a question in the Rajya Sabha today.
Source : PIB
Central Government has approved implementation of a pilot scheme on Smart Card based delivery of essential commodities under Targeted Public Distribution System (TPDS) in Chandigarh Union Territory (UT) and State of Haryana. Under the scheme, the existing ration cards will be replaced by Smart Cards which will have biometric features (fingerprints) of adult members of beneficiary families, based on which verification of genuineness of the beneficiary family will take place and only thereafter the essential commodities will be issued to them from the fair price shops. After implementation of the scheme in pilot States, it will be evaluated so as to assess the cost benefits, suitability of technology and the feasibility of replicability in other States/UTs.
Government of Kerala has recently submitted a proposal for Central financial assistance for implementation of Biometric Identification based Integrated Public Distribution System. After the evaluation of the pilot scheme, it will be considered to be rolled out in other States/UTs, including the State of Kerala.
This information was given by Prof. K.V. Thomas, Minister of State for Agriculture, Consumer Affairs, Food and Public Distribution, in written reply to a question in the Rajya Sabha today.
Source : PIB
August 23, 2010
Postal dept introduces special Rakhi envelopes
LUDHIANA: To ensure timely delivery of Rakhis, the postal department is making a special arrangements, including Rakhi envelopes to separate letter boxes, in order to tackle the rush.
Made of durable and water-proof material, Rakhi envelopes, available in size 11 cm x 22 cm, are available at five post offices in the city. But they are light enough to keep the mail within the basic weight limit as far as possible.
Available in attractive designs pre-gummed with a peel-off strip mechanism for easy sealing, these envelopes are available at a price of Rs 10 each and customer has to use extra stamps along with this envelope as per weight.
Sources said to ensure the speedy delivery, the circle had made special arrangements for collection of the envelopes through postmen, through special letterboxes at important post offices. While special arrangement for sorting and transmission had been also made by engaging extra staff. These post offices had been placed at Miller Ganj post office, head post office, Focal Point post office and Central post office.
Senior superintendent JR Nur said that the envelopes were being introduced with the motive to identify the Rakhi envelopes with the normal mails so that Rakhis could be delivered safely and on time.
Courtesy : Times of India Ludhiyana
August 15, 2010
August 14, 2010
Reservation in Promotion - Treatment of SC/ST candidates promoted on their own merit
Government of India Ministry of Personnel, Public Grievances and Pensions
Department of Personnel and Training Memo No No.3601214512005-Estt. (Res.)
dated the 10th August 2010.
Subject: Reservation in promotion - Treatment of SCIST candidates
promoted on their own merit.
The undersigned is directed to refer to this Department's
O.M.No.36028/17/2001-Est(Res) dated l1th July 2002 which clarified
that SCI ST candidates appointed by promotion on their own merit and not
owing to reservation or relaxation of qualifications will be adjusted against un-reserved points of the reservation roster and not against reserved points.
It was subsequently clarified by this Department's O.M. No.3602811712001-
Estt. (Res.) dated 31.1.2005 that the above referred O.M. took effect from
11.7.2002 and that concept of own merit did not apply to the promotions
made by non-selection method.
2. Central Administration Tribunal, Madras Bench in O.A. No.900/2005
[S. Kalugasalamoorthy vls. Union of India & Others] has set aside the O.M.
No.36028/17/2001-Estt. (Kes.) dated 31.1.2005 and held that when a person
is selected on the basis of his own seniority. the scope of considering and
counting him against quota reserved for SCs does not arise. The High
Court of judicature at Madras in the matter of UOI vls.
S. Kalugasalamoorthy [ WP No.15926/2007 ] has upheld the decision of the
Central Administrative Tribunal.
3. The matter has been examined in the light of the above referred
judgments and it has been decided to withdraw O.M. No. 36028/17/2001-
Estt. (Res.) dated 31.1.2005 referred to above. It is clarified that SCIST
candidates appointed by promotion on their own merit and seniority and not
owing to reservation or relaxation of qualifications will be adjusted against unreserved points of reservation roster. irresnective of the fact whether the promotion is made by selection method or non-selection method.
These orders will take effect from 2.7.1997. the date on which post based
reservation was introduced.
4. These instructions may be brought lo the notice of all concerned
(K.G. Verma )
Director
Tele: 230921 58.
Department of Personnel and Training Memo dated 10.8.2010
Department of Personnel and Training Memo No No.3601214512005-Estt. (Res.)
dated the 10th August 2010.
Subject: Reservation in promotion - Treatment of SCIST candidates
promoted on their own merit.
The undersigned is directed to refer to this Department's
O.M.No.36028/17/2001-Est(Res) dated l1th July 2002 which clarified
that SCI ST candidates appointed by promotion on their own merit and not
owing to reservation or relaxation of qualifications will be adjusted against un-reserved points of the reservation roster and not against reserved points.
It was subsequently clarified by this Department's O.M. No.3602811712001-
Estt. (Res.) dated 31.1.2005 that the above referred O.M. took effect from
11.7.2002 and that concept of own merit did not apply to the promotions
made by non-selection method.
2. Central Administration Tribunal, Madras Bench in O.A. No.900/2005
[S. Kalugasalamoorthy vls. Union of India & Others] has set aside the O.M.
No.36028/17/2001-Estt. (Kes.) dated 31.1.2005 and held that when a person
is selected on the basis of his own seniority. the scope of considering and
counting him against quota reserved for SCs does not arise. The High
Court of judicature at Madras in the matter of UOI vls.
S. Kalugasalamoorthy [ WP No.15926/2007 ] has upheld the decision of the
Central Administrative Tribunal.
3. The matter has been examined in the light of the above referred
judgments and it has been decided to withdraw O.M. No. 36028/17/2001-
Estt. (Res.) dated 31.1.2005 referred to above. It is clarified that SCIST
candidates appointed by promotion on their own merit and seniority and not
owing to reservation or relaxation of qualifications will be adjusted against unreserved points of reservation roster. irresnective of the fact whether the promotion is made by selection method or non-selection method.
These orders will take effect from 2.7.1997. the date on which post based
reservation was introduced.
4. These instructions may be brought lo the notice of all concerned
(K.G. Verma )
Director
Tele: 230921 58.
Department of Personnel and Training Memo dated 10.8.2010
August 13, 2010
The IT Project Phase-II is expected to be completed by September 2012
[ The Government proposes to modernize and upgrade all the post offices across the country. In the Eleventh Five Year Plan, the Department of Telecommunications has an approved project for Computerization & Networking of post offices (upto double handed level). Under this project 12604 post offices have been computerized and the process for computerization of the rest of the double handed post offices and networking them is under progress.
The Department has proposed its IT Project Phase-II with an overall outlay of Rs.1877.2 crores to be incurred in the FY 2010-11, 2011-12 and 2012-13 (upto September 2012). The project envisages building up of a comprehensive IT solution for all the operations in a Post Office, Postal, Banking, Insurance, Retail operations and the required infrastructure for the computerization and networking of all the post offices in the country.
The Department has also launched Project Arrow in identified post offices for upgrading the “core operational areas and “look and feel” of Post Offices for modernisation of Post Offices in the country. So far 1,000 Post Offices from 22 Postal Circles have been upgraded and modernised under the scheme. Another 510 post offices across the country are being covered in 2010-11.
330.47 crores has been utilized for computerization of 12604 post offices and funds to the extent of Rs. 146 crores has been utilised for covering post offices under Project Arrow. During 2010-11 Rs. 84 crores has been earmarked for Project Arrow, in mostly rural and semi-urban areas. Total outlay proposed for Department’s IT project Phase-II is Rs. 1877.2 Crores. Rural ICT solution is proposed for electronically linking of all rural post offices under the project proposal. The solution would provide for supply of appropriate rural ICT devices, rural connectivity & applications to rural population for services including postal, saving bank, postal life insurance and other related operations including MGNREGA wage distribution.
The IT Project Phase-II is expected to be completed by September 2012. Subject to availability of Plan Funds, departmental post offices will be covered under Project Arrow in a phased manner.
This information was given by the Minister of State for Communications & Information Technology, Shri Sachin Pilot in written reply to a question in Rajya Sabha today.
Source : Press Information Bureau
The Department has proposed its IT Project Phase-II with an overall outlay of Rs.1877.2 crores to be incurred in the FY 2010-11, 2011-12 and 2012-13 (upto September 2012). The project envisages building up of a comprehensive IT solution for all the operations in a Post Office, Postal, Banking, Insurance, Retail operations and the required infrastructure for the computerization and networking of all the post offices in the country.
The Department has also launched Project Arrow in identified post offices for upgrading the “core operational areas and “look and feel” of Post Offices for modernisation of Post Offices in the country. So far 1,000 Post Offices from 22 Postal Circles have been upgraded and modernised under the scheme. Another 510 post offices across the country are being covered in 2010-11.
330.47 crores has been utilized for computerization of 12604 post offices and funds to the extent of Rs. 146 crores has been utilised for covering post offices under Project Arrow. During 2010-11 Rs. 84 crores has been earmarked for Project Arrow, in mostly rural and semi-urban areas. Total outlay proposed for Department’s IT project Phase-II is Rs. 1877.2 Crores. Rural ICT solution is proposed for electronically linking of all rural post offices under the project proposal. The solution would provide for supply of appropriate rural ICT devices, rural connectivity & applications to rural population for services including postal, saving bank, postal life insurance and other related operations including MGNREGA wage distribution.
The IT Project Phase-II is expected to be completed by September 2012. Subject to availability of Plan Funds, departmental post offices will be covered under Project Arrow in a phased manner.
This information was given by the Minister of State for Communications & Information Technology, Shri Sachin Pilot in written reply to a question in Rajya Sabha today.
Source : Press Information Bureau
Opening of “Zero deposit/Zero Balance” accounts for OAP under Indira Gandhi National Old Age Pension Scheme with effect from 13 Oct 2009
The rate of interest payable in Monthly Income Scheme (MIS) accounts in post offices is 8 per cent per annum and Bonus at the rate of 5 per cent is also payable on the deposits made under this scheme on or after 8th December, 2007 upon maturity of the deposit.
The interest rates on small savings schemes are regulated/reviewed as per recommendations of Committee on Administered Interest Rates and other related issues chaired by Dr. Y.V.Reddy, the then Deputy Governor, Reserve Bank of India(RBI) , according to which, being administered interest rates, they are benchmarked to average annual yield on Government Securities of comparable maturity in the secondary market, with a suitable spread subject to a maximum of 50 basis point over the benchmark yield, depending upon the maturity and liquidity of the instruments.
Bonus at the rate of 5 percent of the amount deposited in MIS accounts is payable in the accounts opened on or after 8th December, 2007 upon maturity of the deposit.
The Central and State Governments take various measures from time to time to promote and popularize small saving schemes through print and electronic media as well as holding seminars, meetings and providing training to various agencies involved in mobilizing deposits under the schemes.
As part of this ongoing exercise, Government has taken following steps to make the small savings schemes more attractive and investor friendly:-
The benefit of Section 80C of the Income Tax Act, 1961 has been extended to the investments made under 5-Year Post Office Time Deposits Account and Senior Citizens Savings Scheme, with effect from 01.04.2007.
With effect from 1.8.2007, the maximum deposit ceilings of Rs.3.00 lakh and Rs.6.00 lakh under the Post Office Monthly Income Account (POMIA) Scheme has been raised to Rs.4.50 lakh and Rs.9.00 lakh in respect of single and joint accounts respectively.
The penalty on pre-mature withdrawal of deposits under the Post Office Monthly Income Account (POMIA) scheme has been rationalized from 3.5% to 2% on withdrawal on or before expiry of three years and 1% on withdrawal after expiry of three years.
All categories of pensioners have been allowed to open and maintain ‘Pension Account’ under Post Office Savings Account Rules, with effect from 11th July, 2007.
The restriction on opening of more than one account during a calendar month under the Senior Citizens Savings Scheme has been removed with effect from 24th May, 2007.
Opening of “Zero deposit/Zero Balance” accounts for workers employed under NREG Act, under Post Office Savings Account Rules, with effect from 26th August 2008.
Opening of “Zero deposit/Zero Balance” accounts for Old Age Pensioner Account under Indira Gandhi Old Age Pension Scheme, Widows Pensioner Account under Indira Gandhi National Widow Pension Scheme and Disabled Pensioner Account under Indira Gandhi National Disabled Pension Scheme with effect from 13th October 2009.
National Savings Institute, a subordinate organization under the Department of Economic Affairs (Budget Division) also maintains its web site i.e nsiindia.gov.in in collaboration with National Informatics Centre to facilitate interface with the public through wider dissemination of information on small savings and on-line registration and settlement of investor’s grievances.
This information was given by the Minister of State for Communications & Information Technology, Shri Gurudas Kamat in written reply to a question in Lok Sabha today.
Source: Press Information Bureau
The interest rates on small savings schemes are regulated/reviewed as per recommendations of Committee on Administered Interest Rates and other related issues chaired by Dr. Y.V.Reddy, the then Deputy Governor, Reserve Bank of India(RBI) , according to which, being administered interest rates, they are benchmarked to average annual yield on Government Securities of comparable maturity in the secondary market, with a suitable spread subject to a maximum of 50 basis point over the benchmark yield, depending upon the maturity and liquidity of the instruments.
Bonus at the rate of 5 percent of the amount deposited in MIS accounts is payable in the accounts opened on or after 8th December, 2007 upon maturity of the deposit.
The Central and State Governments take various measures from time to time to promote and popularize small saving schemes through print and electronic media as well as holding seminars, meetings and providing training to various agencies involved in mobilizing deposits under the schemes.
As part of this ongoing exercise, Government has taken following steps to make the small savings schemes more attractive and investor friendly:-
The benefit of Section 80C of the Income Tax Act, 1961 has been extended to the investments made under 5-Year Post Office Time Deposits Account and Senior Citizens Savings Scheme, with effect from 01.04.2007.
With effect from 1.8.2007, the maximum deposit ceilings of Rs.3.00 lakh and Rs.6.00 lakh under the Post Office Monthly Income Account (POMIA) Scheme has been raised to Rs.4.50 lakh and Rs.9.00 lakh in respect of single and joint accounts respectively.
The penalty on pre-mature withdrawal of deposits under the Post Office Monthly Income Account (POMIA) scheme has been rationalized from 3.5% to 2% on withdrawal on or before expiry of three years and 1% on withdrawal after expiry of three years.
All categories of pensioners have been allowed to open and maintain ‘Pension Account’ under Post Office Savings Account Rules, with effect from 11th July, 2007.
The restriction on opening of more than one account during a calendar month under the Senior Citizens Savings Scheme has been removed with effect from 24th May, 2007.
Opening of “Zero deposit/Zero Balance” accounts for workers employed under NREG Act, under Post Office Savings Account Rules, with effect from 26th August 2008.
Opening of “Zero deposit/Zero Balance” accounts for Old Age Pensioner Account under Indira Gandhi Old Age Pension Scheme, Widows Pensioner Account under Indira Gandhi National Widow Pension Scheme and Disabled Pensioner Account under Indira Gandhi National Disabled Pension Scheme with effect from 13th October 2009.
National Savings Institute, a subordinate organization under the Department of Economic Affairs (Budget Division) also maintains its web site i.e nsiindia.gov.in in collaboration with National Informatics Centre to facilitate interface with the public through wider dissemination of information on small savings and on-line registration and settlement of investor’s grievances.
This information was given by the Minister of State for Communications & Information Technology, Shri Gurudas Kamat in written reply to a question in Lok Sabha today.
Source: Press Information Bureau
August 8, 2010
Reduction of staff under TBOP/BCR schemes stands withdrawn w.e.f 01.09.2008 consequent upon implementation of MACP
Copy of letter No. 25-5/2010-PE.I dated 19.07.2010 of Department of Posts:-
Sub: - Reduction of staff under TBOP/BCR schemes stands withdrawn w.e.f 01.09.2008 consequent upon implementation of MACP.
The undersigned is directed clarify the position in respect of reduction of staff under TBOP/BCR schemes w.e.f 01.09.2008 during periodical Establishment Reviews consequent upon implementation of MACP and withdrawal of TBOP/BCR Schemes as under:
“Consequent on implementation of time Bound One Promotion (TBOP) Scheme and Biennial Cadre Review (BCR) Scheme, Department of Posts had imposed cuts of 5% in operative staff and 15% in supervisory staff w.e.f 30.11.1983 under TBOP Scheme and later on, additional cuts of 1% in operative staff and 5% in supervisory staff were introduced w.e.f. 01.10.1991 under BCR Scheme. These cuts were introduced as measure of matching savings to offset the financial implications on account of grant of financial upgradations to staff and for obtaining additional productivity. The number of posts reduced under this matching savings/productivity provisions were kept in view at the time of periodical reviews or establishment of augmentation proposals
The said TBOP and BCR Schemes have now been withdrawn w.e.f 01.09.20087 consequent upon implementation of Modified Assured Career Progression Scheme (MACP). Consequently, the number of operative/supervisory posts existing as on 01.09.2008 will be taken into consideration for the purpose of periodical reviews or augmentation proposals of Post Offices establishment. Thus, provisions relating to reduction of staff under TBOP/BCR Schemes stand also withdrawn w.e.f 01.09.2008.”
This issues with the approval of Secretary (P)
Sd/-
(Raj Kumar)
Director (Estt. & DE)
Sub: - Reduction of staff under TBOP/BCR schemes stands withdrawn w.e.f 01.09.2008 consequent upon implementation of MACP.
The undersigned is directed clarify the position in respect of reduction of staff under TBOP/BCR schemes w.e.f 01.09.2008 during periodical Establishment Reviews consequent upon implementation of MACP and withdrawal of TBOP/BCR Schemes as under:
“Consequent on implementation of time Bound One Promotion (TBOP) Scheme and Biennial Cadre Review (BCR) Scheme, Department of Posts had imposed cuts of 5% in operative staff and 15% in supervisory staff w.e.f 30.11.1983 under TBOP Scheme and later on, additional cuts of 1% in operative staff and 5% in supervisory staff were introduced w.e.f. 01.10.1991 under BCR Scheme. These cuts were introduced as measure of matching savings to offset the financial implications on account of grant of financial upgradations to staff and for obtaining additional productivity. The number of posts reduced under this matching savings/productivity provisions were kept in view at the time of periodical reviews or establishment of augmentation proposals
The said TBOP and BCR Schemes have now been withdrawn w.e.f 01.09.20087 consequent upon implementation of Modified Assured Career Progression Scheme (MACP). Consequently, the number of operative/supervisory posts existing as on 01.09.2008 will be taken into consideration for the purpose of periodical reviews or augmentation proposals of Post Offices establishment. Thus, provisions relating to reduction of staff under TBOP/BCR Schemes stand also withdrawn w.e.f 01.09.2008.”
This issues with the approval of Secretary (P)
Sd/-
(Raj Kumar)
Director (Estt. & DE)
August 3, 2010
Govt may bank on post offices for financial inclusion - Economic Times
NEW DELHI: The neighbourhood post office may soon become a full-fledged bank as the government could facilitate a bank licence for India Post as part of a multi-pronged strategy to achieve greater financial inclusion.
The Reserve Bank of India is expected to soon come out with draft guidelines on licences to new banks.
“India Post is a strong contender for banking license given its spread across the country,” said a finance ministry official.
The postal department already works as a quasi bank, providing a host of savings products, postal life insurance, pension payments and money transfer services through its 1.55 lakh branches, more than any other bank.
It, however, does not provide credit, the most important bit of financial inclusion. A banking licence will help fill that gap enabling the delivery of modern banking facilities in areas lacking access to financial products, credit and savings.
The department is expected to soon seek the required clearances from the Postal Services Board to expedite the process.
The Department of Post has already hired international consultancy firm Accenture to modernise the post offices across the country, which will also help create infrastructure for banking services.
“Once the infrastructure in place, we will able to assess if we need to rope in another player or not and accordingly get clearances from the RBI,” said an official with the Department of Post, adding that a Cabinet approval will also be required before commencing operations.
The idea of the Department of Post evolving into a bank has been around for a while. In 2006, India Post had even decided to appoint consultants to chalk out a regime for the transformation.
“There was a proposal to set up a bank with an initial capital of Rs 1,000 crore. The bank was to be set up as a subsidiary with the postal department holding a 51% stake in it,” said the finance ministry official.
More recently, the idea of a banking licence for India post was discussed in the inter-ministerial committee for financial inclusion, said an official of the Postal Services Board adding that the organisation was keen to provide banking services.
It is already working on core banking solution (CBS) for nearly 4,000 of its branches, which will allow customers to operate their accounts from any of the networked branches. The department has provided for Rs 106 crore towards development of CBS software.
Both the government and RBI have indicated that financial inclusion will be major criteria for giving new banking licences. “The final decision on granting a new licence will be taken by RBI. It will be a consultative decision as India Post is a government arm,” the official said.
A government committee on financial inclusion had also recommended that “India Post, with its ubiquitous reach should actively position itself to offer a low-cost, light-weight bank account to anyone enrolling for a Unique Identity Number.”
As per the committee report, nearly 16 crore people use India Post to save Rs 3,23,781 crore as on March 31, 2007. Out of this, deposits in savings bank account alone is Rs 16,789 crore, which makes a strong case for India Post to deepen the level of financial transactions and offer banking services to the rural population.
The Thirteenth Finance Commission has even proposed a budget of Rs 3,000 crore to be used for delivering an incentive of Rs 100 into the bank account of each BPL resident who enrolls for the UID Project.
Source : Economic Times
The Reserve Bank of India is expected to soon come out with draft guidelines on licences to new banks.
“India Post is a strong contender for banking license given its spread across the country,” said a finance ministry official.
The postal department already works as a quasi bank, providing a host of savings products, postal life insurance, pension payments and money transfer services through its 1.55 lakh branches, more than any other bank.
It, however, does not provide credit, the most important bit of financial inclusion. A banking licence will help fill that gap enabling the delivery of modern banking facilities in areas lacking access to financial products, credit and savings.
The department is expected to soon seek the required clearances from the Postal Services Board to expedite the process.
The Department of Post has already hired international consultancy firm Accenture to modernise the post offices across the country, which will also help create infrastructure for banking services.
“Once the infrastructure in place, we will able to assess if we need to rope in another player or not and accordingly get clearances from the RBI,” said an official with the Department of Post, adding that a Cabinet approval will also be required before commencing operations.
The idea of the Department of Post evolving into a bank has been around for a while. In 2006, India Post had even decided to appoint consultants to chalk out a regime for the transformation.
“There was a proposal to set up a bank with an initial capital of Rs 1,000 crore. The bank was to be set up as a subsidiary with the postal department holding a 51% stake in it,” said the finance ministry official.
More recently, the idea of a banking licence for India post was discussed in the inter-ministerial committee for financial inclusion, said an official of the Postal Services Board adding that the organisation was keen to provide banking services.
It is already working on core banking solution (CBS) for nearly 4,000 of its branches, which will allow customers to operate their accounts from any of the networked branches. The department has provided for Rs 106 crore towards development of CBS software.
Both the government and RBI have indicated that financial inclusion will be major criteria for giving new banking licences. “The final decision on granting a new licence will be taken by RBI. It will be a consultative decision as India Post is a government arm,” the official said.
A government committee on financial inclusion had also recommended that “India Post, with its ubiquitous reach should actively position itself to offer a low-cost, light-weight bank account to anyone enrolling for a Unique Identity Number.”
As per the committee report, nearly 16 crore people use India Post to save Rs 3,23,781 crore as on March 31, 2007. Out of this, deposits in savings bank account alone is Rs 16,789 crore, which makes a strong case for India Post to deepen the level of financial transactions and offer banking services to the rural population.
The Thirteenth Finance Commission has even proposed a budget of Rs 3,000 crore to be used for delivering an incentive of Rs 100 into the bank account of each BPL resident who enrolls for the UID Project.
Source : Economic Times
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